How do Layer 1 protocols like Ethereum and Bitcoin differ from Layer 2 solutions such as the Lightning Network or Optimistic Rollups?
Layer 1 is basically the base layer of these blockchains where transactions are directly executed. Layer 1 is the primary and fundamental layer of a blockchain. Wherein Layer 2 is built on top of Layer 1. Layer 2 are built to enhance and solve some of the problems of Layer 1.
What are the unique challenges and advantages of each, and how do they impact scalability, security, and user experience in the blockchain ecosystem?
Layer 1 is generally more secure than Layer 2. This is because in L1, there is a bigger network size that allows for more decentralization compared to L2. L2 functions with a smaller network size. Another reason why L1 is more reliable is because this is where transactions are directly recorded which allows for maximum transparency compared to L2 that makes transactions off-chain. However, L2 allows for more scalability that the L1 can’t handle. L2 allows for faster and cheaper transactions. Not by a much, though. Since developers are thinking of adding even more layers.