Have you ever stumbled upon words such as layer-1 and layer-2 blockchain? If you are interested in blockchain technology or have invested in a project, such terms should be everywhere.
Let us share about it in our simplified Techcryption style!
A blockchain is a time-stamped series of immutable records managed by a cluster of computers not owned by any single entity. Therefore, it is a decentralized platform such as Bitcoin and Ethereum.
You can read more about blockchain here.
We expect a blockchain platform able to perform and deploy its features. However, as the ecosystem grows, it has to keep up. It means that a blockchain platform has to be able to scale accordingly. That is what we call scalability.
For example, the Bitcoin blockchain faces several scalability issues as the network and users grow. Issues like high fees, slow transactions, and other scalability issues. To tackle the problems new improvements have to be introduced. That is when layer-2 blockchain comes in.
A layer-2 blockchain is a blockchain platform that provides solutions for issues layer-1 blockchain has. While a layer-2 blockchain has its protocol, it operates based on layer-1 blockchain.
Let’s take the Bitcoin blockchain as an example. As we mentioned earlier, it has scalabilities in high fees and transaction speed. A layer-2 called Lightning Network was introduced to offer solutions.
Lightning Network is able to provide Bitcoin blockchain with faster transaction speed, reduce network traffic, and lower fees. You can read more about Lightning Network here.
It is also possible that layer-2 solutions offer to bridge between two or more blockchain platforms. Bridging is a process that allows tokens to be transferred between blockchain platforms.
You can read more about blockchain bridging here.
To simplify what is layer-1 and layer-2, consider layer-1 as the base protocol that faces scalability issues. Layer-1 couldn’t solve the issues on its own, so layer-2 will help in providing the solutions.