How do Layer 1 protocols like Ethereum and Bitcoin differ from Layer 2 solutions such as the Lightning Network or Optimistic Rollups? 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 form the foundation of the blockchain, they are responsible for fundamental functions like security, transaction, consensus, and storage. However, they face scalability issues and slow, expensive transactions. This has spurred the development of Layer 2 solutions like the Lightning Network, which operate on top of Layer 1 to improve performance. These solutions allow transactions to be processed off the main chain, increasing speed and reducing costs. In short, “Layer 1” and “Layer 2” describe different levels of infrastructure that work together to improve the efficiency of blockchain networks. Both layers are essential, improving scalability, security, and consequently offering cheaper and faster transactions, leading to a better user experience.
Layer 2 may have security vulnerabilities but they are often mitigated by Layer 1 security.