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About Ethereum Blockchain Network Layers

Validated Individual Expert

Ethereum since its conception until this day has become the definitive blockchain for creating many types of applications due to its popularity and effectiveness. This ecosystem is known for its community of developers and its active ecosystem of decentralized applications and protocols. This has made it one of the most widely used blockchain platforms in the world, with a wide range of use cases and applications across industries. But in the case of Ethereum, how is it made to structure the entire codebase into one blockchain of this level? To achieve this, core developers found the idea between network layers to separate different critical functions of the Ethereum blockchain such as:

  1. Application layer
  2. Smart contract layer
  3. Consensus layer
  4. Network layer
  1. The application layer consists of all the smart contracts and dapps built so far and executed with Ethereum Virtual Machine(EVM). Developers are using specific smart contract programming languages to run those code bases. The application layer is the top layer in the Ethereum network structure having direct contact with everybody who would like to participate in the building process.
  2. The smart contract layer is often considered a subset of the application layer in the Ethereum architecture. While smart contracts are technically part of the application layer, they are often referred to as a separate layer in the Ethereum architecture because of their importance in enabling the creation of decentralized applications on the Ethereum network. It is the place where the all raw logic behind the dapps is being built. Smart contracts are auto-executing blocks of codes with their own logic and conditions. They are stored on the blockchain, attached to this layer, and are immutable however can be *upgradable!*
  3. The consensus layer is probably the most important layer in Ethereum. Ensures all the nodes and validators agree on the blockchains state. It keeps the entire blockchain decentralized with all actors being as equal as possible. Consensus clients need to participate in block gossip so that they can receive new blocks from peers and broadcast them when it is their turn to be block proposers. It currently uses a Proof of Stake consensus mechanism with validators as block producers.
  4. The network layer is made for transmitting data between full nodes, light nodes, and validators using a peer-to-peer protocol for communication. It is the lowest layer in the complex Ethereum network layers. If you ever tried to run a node and were looking for peers to connect to, this layer makes it responsible for broadcasting between nodes. The network layer is critical for ensuring the security and reliability of the Ethereum network

*Upgradable smart contracts*

It's worth adding an explanation here of this remark although we step aside from the main topic a bit.It is a highly contradictory statement when we mention that smart contracts are immutable and upgradable however both of those types exist on many blockchains including Ethereum. Blockchain, basically as one big smart contract is meant to be immutable by default so no other third party can put their bad hands into that. So why do upgradable smart contracts exist despite that and what does it mean?First things first upgrading the smart contract doesn't mean we rewrite or modify the smart contract code, but we swap one smart contract out for another where the end user does not have to change how they interact with the dApp. The old smart contract is getting simply abandoned. This feature is made available or not by developers during the creation process.

Reasons for having upgradable smart contracts can be:

  • Bug fixes
  • Code enhancements
  • Modifying unwanted functionality
  • Bad intentions from core developers of certain Dapps!

Yes, it can be an example of a double-edged sword because not every time dApp which has upgradable smart contracts is meant to do good in the long term. It is a case of unwilling harm or vice versa.We don't want to necessarily say that developers use upgradeable smart contracts just to do harmful acts towards the end users, although those cases existed in the past I believe, they usually happen because of being unaware of what gap its code can have.That leads hackers to exploit lots of money from smart contracts. Based on the past we can see they can be very risky and we should step on the dApps with bigger care. In order to be more careful what we can do is, get to know the founders, read audit reports, make sure the code is open source, and last but not least make sure you understand where your dApp’s income comes from otherwise, you will be the source of the income to other people.

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