There are more and more cryptocurrencies and blockchains being made available to people today, due to which, it is hardly possible that you will not know whether you can use Layer 1 or Layer 2 chains or not. Hiding complexity with blockchain can be a huge advantage for you. But along with this, also keep in mind the system in which you are going to invest or are using it, then first of all know whether it is worth your understanding. Check these trading tips from Trustpedia.
Through this article, we will try to make you understand all those differences between Layer 1 and Layer 2 blockchains and various solutions of different scalability:
What Is a Layer 1 and Layer 2 Blockchain?
The popularity of blockchain technology and cryptocurrency is growing rapidly, due to which the time spent by users as well as the number of transactions is increasing. While it’s easy to learn how to revolutionize blockchain, the simultaneous growing demands for scalability and growing system capacity – always seem like a challenge. Public blockchain networks are considered to be secure and decentralized, which have struggled to achieve high throughput. Happily, lots of enthusiasts and professionals are working on scalable solutions. The architecture of the primary blockchain (layer 1) is intended to be replaced by some of these solutions, while layer 2 protocols that run on top of the underlying network are the focus of other ones.
You might not be aware that you are utilizing a Layer 1 or Layer 2 chain due to the abundance of blockchains and cryptocurrencies available. Although there are advantages to masking blockchain complexity, it’s still important to understand the system you’re using or investing in. You will understand the distinction between Layer 1 and Layer 2 blockchains as well as the various scaling options after reading this article.
How Does Layer 1 Blockchain Work?
Hence the transaction validation and finalization process will be initiated soon. However, after the transaction has been made, a block will be added to every transaction as they were collected. Every block is cryptographically protected and linked to the blocks which came earlier thus becoming the blockchain. The purpose of blockchain is to cross-check the blocks and thus the. After that new crypto tokens were received to reward their time investment and fruitful efforts.
Know the Limitations of Layer 1 and Layer 2 Scaling Solutions
Layer 1 and Layer 2 solutions have many unique advantages but also some disadvantages. Large-scale protocol modifications can be made most affordably by working with Layer 1. This also implies that validators should be persuaded to accept modifications made through hard forks. Scalability may be increased in a much quicker manner with Layer 2. Nevertheless, a significant portion of the safety of the original blockchain may be lost, based on the technique used. People have confidence in flexible and secure networks such as Bitcoin and Ethereum.
Pros of Layer 1 Blockchain
Security features of layer 1 blockchain
Due to their cryptographic encryption, blockchains are highly secured which ultimately makes them worthwhile among users.
Cons of Layer 1 Blockchain
The scalability of Layer 1 blockchains is not so far; however, as compared to Layer 1, the off-chain scaling is much more reliable as per user demands.
Pros of Layer 2 Blockchain
The capacity and speed of the network can be enhanced with the help of layer 2 which helps to handle more transactions. Furthermore, the blockchain like Ethereum and Bitcoin execute more than a thousand transactions every second.
Cons of Layer 2 Blockchain
Although L2 reveals so many benefits, it can process only the elements of transactions to be executed by them since they are not able to operate or function independently, because of a limited set of features. They are applicable only for specific conditions.