What are Blockchains and Networks?

Step 1: Understanding Blockchains and Networks

To begin, let's clarify what blockchains and networks are.

What is a Blockchain?

A blockchain is a decentralized digital ledger that records transactions across a network of computers. It consists of a series of blocks, each containing a list of transactions, which are cryptographically linked to the previous block, forming a chain. This structure ensures that data cannot be altered without the consensus of the entire network, making it secure and transparent. Blockchains are the underlying technology for cryptocurrencies like Bitcoin, but they can also be used for many other applications, such as smart contracts and decentralized applications.

Think of a blockchain as a digital notebook where each page (block) is permanently connected to the next. Everyone who uses this notebook has the same copy, so nothing can be changed unless everyone agrees. This makes it secure and trustworthy.

What is a network?

In the blockchain context, a network refers to the infrastructure that connects all the nodes (computers) participating in a blockchain. Each blockchain operates on its own network, which enables nodes to communicate, share, and validate transactions. For example, the Bitcoin network is the infrastructure that supports the Bitcoin blockchain, and the BNB Smart Chain network supports the BNB Smart Chain blockchain. Different networks have different protocols and rules for how transactions are processed and validated, and each serves as the backbone for its respective blockchain.

A network is like a road system where cars (data) travel between different places (nodes). Each blockchain has its own road system, with unique rules about how cars move and how traffic is controlled. This system allows everything to run smoothly and securely.

Step 2: Types of Blockchain Networks

Blockchain networks can be categorized into different types based on their functionality and layers. Below are the main types of blockchain networks and how they work.

Layer 1 Networks

Layer 1 networks are the foundational blockchains that operate independently and have their own native cryptocurrencies. Examples include:

Bitcoin (BTC): The original blockchain. Extremely secure and decentralized, but transactions can be slow and it lacks advanced features like smart contracts.

Ethereum (ERC20): Strong security and smart contract capabilities, but transaction fees (gas) can be high during congestion.

BNB Smart Chain (BEP20): A faster, cheaper alternative to Ethereum. Lower fees and quicker confirmations.

Tron (TRC20): Very popular for stablecoin transfers (especially USDT). Fast and cheap.

Solana (SOL): High-throughput chain known for very fast transactions and low fees.

Layer 2 Networks

Layer 2 networks are built on top of Layer 1 blockchains to improve scalability and reduce transaction costs. They handle transactions off the main chain and settle back to the Layer 1 network.

Polygon (MATIC): A popular Layer 2 solution for Ethereum, offering faster and cheaper transactions while leveraging Ethereum's security.

Arbitrum (ARB): An Ethereum Layer 2 using optimistic rollups — cheap, fast, and still anchored to Ethereum security.

Lightning Network: A Layer 2 solution for Bitcoin, designed to enable faster, lower-fee transactions.

Step 3: Summary

Layer 1 Networks: The foundation of a building. They operate independently, provide the main base for transactions, and have their own native tokens (BTC, ETH, BNB, TRX, SOL). They are responsible for the core structure and security of the blockchain.

Layer 2 Networks: Extra lanes added to the highway to prevent traffic jams. They are built on top of a Layer 1 to improve scalability and transaction speed while still benefiting from the security of the underlying Layer 1.

Different blockchains have different strengths. Ethereum offers advanced smart contracts at higher cost; BSC and Polygon are cheaper but trade off some decentralization; Tron is very efficient for stablecoins; Solana is built for raw speed.

Step 4: Networks supported on X4T

X4T is multichain. You can deposit, withdraw and trade on:

• BNB Smart Chain (BEP20) — default network, required for fiat cash-out
• Ethereum (ERC20)
• Polygon (MATIC)
• Arbitrum (ARB)
• Tron (TRC20)
• Solana (SOL)
• Bitcoin (BTC)

Important reminder: Cash-out to fiat (cash at the office or bank transfer) is only possible with BEP20 USDT/USDC. Swap into BEP20 first if your funds are on another chain.

Step 5: A Practical Example — Picking the right network for USDT

You want to send USDT into X4T, but you see options like USDT BEP20, USDT ERC20 and USDT TRC20.

These are the same dollar value of USDT, but on three different networks. You must pick the network that matches the wallet you are sending from:

1. Check on which network your USDT currently lives (in your external wallet or exchange).
2. In X4T, open Deposit → Crypto → USDT.
3. Select the matching network (e.g. TRC20 if your USDT is on Tron).
4. Copy the deposit address shown for that network.
5. Paste it into your external wallet and send.

Sending USDT on the wrong network is like pouring diesel into a gasoline engine — it does not work and the funds can be lost.

Step 6: Next Steps

Verify Network Compatibility: Always check that the network selected in X4T matches the network you are sending from.

Use Cross-Chain Swaps: If your funds are on the "wrong" network, swap them inside X4T to the network you need (e.g. into BEP20 for cash-out).

Stay Informed: The blockchain world evolves quickly — keep an eye on our help center for updates.

Understanding blockchains and networks can seem complex, but with X4T's multichain support and unified wallet, picking the right one is just a dropdown.

Updated on: 08/06/2026