The world of crypto Blockchain is really complex. But once you understand the analogy of layer one and layer two, then nothing will seem complicated to you. Everything lies in the basics. When it comes to speed as well as cost, layer one and layer two can eliminate major problems of Blockchain.
Let’s understand everything in simple language.
Layer 1 Blockchain
The main layer or the basic Blockchain network comes under layer one. Everything regarding the security, storage as well as transactions are handled by layer one.
Popular Examples
Ethereum
● It handles the inability of smart contracts as well as dApps
Solana, B&B chain,cardano
● These are just some famous examples of layer one transactions.
Bitcoin
● Digital money and transactions regarding them happens with the help of bitcoin as well as layer one.
Features
Some of the best features of year one are as follows.
● The transactions under layer one are completely secure and decentralised.
● Takes care of its transactions by itself.
● All the rules of the Blockchain are set by layer one
● Scalability issues are always present because at peak time the speed as well as fees can get affected.
Problems of layer 1
Lots of people are using layer one at the same time. That’s why many problems can occur in it such as speed and expenses. Let’s take a deeper look into it.
● It takes several minutes for a bitcoin transaction to happen.
● Whenever a drop comes in, the demand for NFT or sudden change in the defi activity always gets congested.
This is the right time for later 2 to come and do magic.
Layer 2 Blockchain
Basically, this technology is wrapped on the basis of layer one technology. It handles all of the transactions outside the Blockchain. Whatever the results hold and reports back to layer one.
Benefits
Layer 2 is very beneficial because it provides
● Low fees
● Faster transaction
● Mention is less congested at the time of peak season.
Examples of layer 2
Bitcoin
● Lightning network
○ It gives you fully cheap as well as instant payments of bitcoin.
Etherium
● Polygon
○ This is an example of popular layer 2 . Basically it reduces the extra gas fees.
● Optimism
○ Ethereum is more scalable thanks to this rollup
● Arbitrum
○ The smart contract transactions happen quickly thanks to this layer 2.
Importance of layer 1 And Layer 2
Both Blockchain pathways are important for each other. The layer one is the main network of Blockchain where you can record transactions. The availability of data, its finality as well as the security is completely given in layer one. Whenever you are using native cryptocurrency then this Blockchain is perfect for hosting it.
When it comes to scalability then the off chain transactions are processed in layer two. It reduces the congestion as well as the speed of the transaction is increased. The security of layer two is better than layer one. NFT’s, gaming are taking best into security when they are used through the layer one.