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Understanding the layer 2 solution blockchain

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Understanding the layer 2  solution blockchain!!!

If you're looking to get a better understanding of blockchain you've come to the right place. In this article, we'll be discussing the layer 2 solution blockchain. This type of blockchain is different from the original in that it offers scalability and improved performance. We'll discuss how this works and why it's becoming a popular choice for businesses.


If you're looking to get a better understanding of blockchain you've come to the right place. In this article, we'll be discussing the layer 2 solution blockchain. This type of blockchain is different from the original in that it offers scalability and improved performance. We'll discuss how this works and why it's becoming a popular choice for businesses. Since the launch of the Bitcoin blockchain, it has grown in popularity. Excluding payments, blockchain has a wider range of applications because it is highly decentralized and secure.


No single blockchain can provide decentralized security and scalability for optimal functionality. Most people tend to sacrifice some of these elements.


In this article, we will introduce layer 2 blockchain solutions and explain how layer 2 protocols work and why they are used in blockchain networks.

Visit our article about Understanding the layer 1.

The layer-2 blockchain concept

  • A layer 2 blockchain network operates on top of another network that forms an auxiliary protocol. A layer 2 blockchain is different from a layer 1 blockchain because it does not depend on a layer 1 protocol (the base layer).
  • The purpose of the Layer 2 protocol is to assist in validating transactions thereby minimizing the tasks handled by the base layer. These protocols allow blockchain networks to process transactions faster. This enables the network to accommodate and manage many users.
  • Blockchain transactions are often slow compared to usual payment methods. Performance usually depends on the blockchain structure. Generally, blockchain transactions go through different stages before they are approved and completed. Some of these stages include acceptance mining Distribution and verification.
  • The layer 1 blockchain handles the activity of processing transaction verification. However, this affects the processing speed and thus the scalability and experience of the blockchain. Layer 2 blockchains support layer 1 blockchains by freeing them from specific tasks. this makes The layer-1 blockchain handles specific functions such as security and control.



Layer-2 blockchain protocols 


Here are some of the most commonly used layer 2 blockchain protocols:


Nested blockchains

Nested blockchains consist of primary and secondary chains designed so that one chain can operate on top of the other. The purpose of the main chain is to assign tasks and control all parameters. The secondary chain then executes the transaction.


To better understand the analogy let's take a company as an example. A supervisor can assign a difficult task to several team members instead of just one person. When tasks are completed team members can report to the manager to approve and mark the work as complete.


Nested blockchains ensure that one primary chain can assign tasks to multiple secondary chains. After completing the assigned tasks the chain can report approval.


State channels

In-state channel parties interact directly in the blockchain network. Blockchain users can execute transactions without involving the main chain. Miners spend the least amount of time increasing processing speed.


State channels do not require transactions to be verified through a layer 1 blockchain. This is because the verification of resources is done through the smart contract mechanism. Upon successful completion of the transaction, the resulting state is stored on the main layer.


State channels protect transaction details exchanged between different parties. However, the final transaction details are stored in the ledger for public access to maintain records.


Sidechains

Sidechains are sidechains linked to the main chain using a two-way peg. We think of it as a forest where trees can act as sidechains and the forest itself is the main chain. They are designed to handle large volumes of transactions.


Sidechains assist the mainchain in verifying various transactions in the blockchain. Then the main chain has enough time to handle security and resolve disputes.


Sidechains are not the same as state channels. The reason is that they store transaction records on a publicly accessible ledger.


This means that if the sidechain is attacked it will not affect the operation of the main chain. However, sidechains take a lot of time and effort to design and build.


Rollups

These are layer 2 protocols that perform computations outside the main chain. In this blockchain, the transfer of transaction details occurs after a given time interval. This helps maintain records.


Aggregate processing transactions also do not interfere with the main layer. This results in higher throughput with minimal transaction costs. Since the aggregated transaction details are stored on the main layer the security of the aggregation is guaranteed.


Optimistic rollups

Optimistic rollups ensure that every transaction executed on the blockchain is valid.


However, in most cases, optimistic rollups take a considerable amount of time to confirm transactions. If a challenge arises this waiting period provides ample time for aggregation to resolve disputes.


Zero-knowledge rollups

They perform off-chain computations before submitting proofs of validity for the main chain. They sometimes use smart contracts to keep funds in the base layer.


Once the proof of validity is submitted and the main chain has verified and confirmed the transaction the funds are released.


Layer 2 blockchain advantage

Here are some of the benefits of layer 2 protocols in the blockchain ecosystem:


Improved security

  • Layer 1 blockchain solutions rewrite base layer protocols to improve scalability. This is done by adding blocks to the chain network or increasing the speed at which new blocks are verified.
  • However, interfering with the architecture of the blockchain is never a good practice. It can lead to serious security issues for the chain network.
  • Layer 2 blockchain solutions address security challenges. No changes will be made to the base layer as a layer 2 solution has been made to complement the base layer. Therefore no changes will be made to the underlying protocol.


Increased transaction speed

  • In layer 2 protocols transactions are processed off-chain. This minimizes the workload of the chain increasing the speed and scalability of the blockchain.
  • As mentioned earlier layer 2 solutions also free the main chain from performing tasks. So the main chain can focus on the security and decentralization of the blockchain.
  • Additionally, layer 2 protocols can be enhanced to process computations faster. This results in increased throughput.


Increased scalability

Layer 2 blockchains are designed to provide scalability for blockchain applications. The off-chain protocol ensures higher throughput of the blockchain network.


This ensures that the application of the blockchain can be easily scaled so users can enjoy a great experience regardless of the network load of the blockchain.


Reduced transaction fees

  • In a blockchain network, miners are responsible for transaction verification. This means that miners utilize the blockchain's cryptographic algorithms to perform verification.
  • As users join the blockchain network the process involves enormous computing power. As a result, the size of executed transactions tends to grow clogging up the entire system.
  • However, miners may not have the required processing resources. Therefore they can choose to use expensive transactions.
  • Layer 2 blockchains minimize the processing resources required to handle verification. This reduces transaction costs as miners can process more transactions.



Layer 2 solutions are the main way to decentralize blockchain networks. These protocols provide miners with ample computing resources and lower transaction fees. Through layer 2 protocols blockchain can also be integrated into global commerce. This can help build networks that are useful to different industries.

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