Steemit Crypto Academy Contest / S13W5 - Layer 2 Blockchain
Steemit friends! I am happy to have you here reading through my post, in which I talked about "Layer-2 blockchain"which is organized in the SteemitCryptoAcademy community.
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You know, when it comes to things about blockchain and crypto we have one and two, which one is regarded as the first, which two is regarded as the second that is but upon the first which layer 2 is an example of what a blockchain that is built on layer 1 which you are going to learn more in this post.
What is layer 2 in a blockchain and how does it differ from layer 1?
Some people call layer 2 an off-chain network that is built on top of another blockchain which is layer 1 to provide more capabilities to the network. Well, Layer 2 in a blockchain simply means a secondary, system, technology, or blockchain layer that is but on top of a layer 1 blockchain network.
Layer 2 in a blockchain helps layer 1 to provide more capabilities to the network by making the scalability better, reducing transaction fees, and making transactions faster. The solution that layer 2 provides to layer 1 can be in different forms such as roll-ups, side chains, and many other forms.
Bitcoin, Lightning network, Ethereum, and Polygon are clear examples of layer 2 blockchain which provides a solution to layer 1 which provides the main framework of a blockchain network. This means layer 2 acts as a supportive blockchain to layer 1 since it adds more features and functionality to layer 1.
How Layer 2 Differ from Layer 1
Understanding, how layer 2 differs from layer 1 blockchain is very important as it will help you to know their functionality and differences.
| Layer 2 | Layer1 |
|---|---|
| Layer 2 can process as many transactions as possible within a second which is faster | Layer 1 transaction is slow and few transactions can only be carried out within a second. |
| It processed higher transactions separately | Limited transaction proceeds which are based on network |
| Lower transaction fees since it makes use of on-chain to process data | Higher transaction fees since it lacks scalability |
| It is not as secure as layer 1 since its security is dependent on layer 1 | It is highly secure since it is the first upon which layer 2 is built. |
Give real-world examples of Layer 2 solutions and explain how they work.
The real-world examples of Layer 2 solutions are
- Ethereum Plasma and
- Bitcoin Lightning Network
Both examples of layer 2 solutions are striving to increase transaction speed, even though they have their mechanism. The Bitcoin Lightning Network is a network that is based on state channels, which are channels that are attached to a blockchain to carry out operations and report the operation to the main blockchain. The state channels are mostly used as a payment channel for making transactions to have speed.
As for Ethereum Plasma its side chains consist of mostly small blockchains that are in the structure of a tree. The main work of layer 2 solution is to create a secondary framework for layer 1, for transactions can be processed separately (independently) in layer 1 which is the reason why it is mostly called "off-chain" scalability solutions.
The Bitcoin lightning network, creates a peer-to-peer (P2P) payment system between two different people just as the Binance peer-to-peer system is. After creating a P2P system for people to use, a lightning network will then help both parties in making transactions more scalable and cheaper. Lightning network stands as a ledger that both parties who take place in performing P2P transactions can rely on.
Once a transaction is established in a lightning network, the channel will then allow the party who created the transaction to send an unlimited amount of transactions which will act as its ledger for the receiver party to make payment. This means before a payment channel can be created, the party who is to make the payment must have to lock a certain amount of Bitcoin (BTC) in the network.
Let's consider looking at this example.
Mary, went to a coffee shop and the seller decided she should make payment in Bitcoin Mary agreed to make a small transaction for each cup of coffee she took, but considering the issue of scalability in Bitcoin and the transaction fees.
With the help of the lightning network, Mary opened up a payment channel with the shop where she bought coffee. Each coffee that she buys will be recorded on that channel until the coffee shop is paid. A smart contact is created by the lightning network between Mary and the coffee shop to interact with each other.
How does layer 2 help reduce transaction fees on a blockchain and facilitate interoperability between different blockchains??
Layer 2 help reduce transaction fees on a blockchain and facilitate between different blockchain, by removing transaction from the main blockchain network. It also helps in reducing congestion and improving a blockchain network. Also, the layer 2 solution provides some security measures for the layer 1 blockchain which offers perfect answers for the problem of scalability surrounding the blockchain network.
It is the lower congestion of the network that result in a reduction of transaction fees which in turn make transaction faster. Layer 2 is very important for blockchain evolution and the use of web3. Ethereum is a practice example of a layer 2 network that makes use of proof of stake consensus for reducing network congestion.
Layer 2 and layer 3 blockchains look like blockchains that still have some differences which layer 2 solution is most on reducing congestion in the network by removing transactions from the main chain which is the layer 1 we have previously discussed.
Layer 2 ensures that layer 1 has a better performance. Layer 3 provides better communication among different blockchain protocols which also makes the communication between layer 1 and layer 2 blockchain work effectively.
What is the underlying layer used by the Steem blockchain, and how does this layer facilitate transactions and interactions on the platform?
Steem is well-known as a blockchain-based social media network that allows everyone to connect discover and share on the blockchain. Steem is a layer 1 blockchain that is based on the Delegated Proof of Stake (DPoS) algorithm.
The steem blockchain facilitates transactions per second with a three-second per block time. As I have introduced earlier, the DPoS consensus mechanism is what steem blockchain makes use of.
Witnesses are the people who validate and confirm transactions on the Steem blockchain. To this on the Steem blockchain which is a layer 1 network and a social media blockchain, 75% of whatever is generated from staking or post is sent directly to the reward pool which then compensates users (authors) that have posted on the Steemit platform which is power by Steem blockchain.
The rewards pool, of the steem blockchain, is split between an author who has published a post, and the curators who voted on the post.
What would be the implications of integrating a layer 2 solution on the Steem blockchain in terms of scalability, costs, and ease of use for users?
Layer 2 solution clears the air that it is the best in addressing the issue of scalability, cost and so on that layer 1 network does face which I can say that it will be a good thing if it can be integrated into the Steem blockchain.
However, the implication of integrating a layer 2 solution to the Steem blockchain is that validators can commit fraud using a layer 2 solution. Well, this can be possible because layer 2 relies on a different (separate) set of validators before the transaction can be processed.
Another implication is that layer 2 is seen as not a fully decentralized blockchain solution since it makes use of a consensus mechanism that is separate. Finally, for this computation power will be needed for implementation and development.
@dave-hanny, @yakspeace, and @kuzyboy I am inviting you all
Hola saludos cordiales jasminemary.
Las Blockchain de capa 2 están diseñadas sobre la capa 1 y estas vienen a solucionar problemas que existen en dicha capa.
Muy buena participación, te deseo mucha suerte.
Feliz y bendecido día.
Hello friend.
You have put your efforts in this post and You have explained every concept in simple words. I really liked the example you have given in your post making that diagram on a paper in which you are explaining about Lightning Network.
These examples helps everyone to understand about these concepts more easily. I appreciate your efforts.
Good Luck for the contest.
Thank you for your words of encouragement.
Thank you, friend!
I'm @steem.history, who is steem witness.
Thank you for witnessvoting for me.
please click it!
(Go to https://steemit.com/~witnesses and type fbslo at the bottom of the page)
The weight is reduced because of the lack of Voting Power. If you vote for me as a witness, you can get my little vote.
Great post highlighting the crucial concept of Layer 2 blockchain! your explanation of the difference between Layer 1 and Layer 2 is Clear & insightful. The real-world examples like Ethereum Plasma and Bitcoin Lightning Network Make the complex topic more tangible . Its impressive how Layer 2 solutions through mechanisms like State channels and side chains enhance scalability reduce transaction fees & make transactions faste r.
Your discussion on the implications of Integrating Layer 2 on the Steem blockchain is thought provoking. While it could address scalability issues and reduce costs you rightly point Out Potential challenges like fraud possibilities and concerns About decentralization.
Wishing you the best in the SteemitCryptoAcademy contest! Your post is a valuable contribution to Understanding Layer 2 in blockchain technology. Keep up the Excellent work! 🚀✨
Thank you for your amazing support friend.
Upvoted. Thank You for sending some of your rewards to @null. It will make Steem stronger.
Hello friend.
You have digged the topic very well and especially I must appreciate the research work that you have done in completing the task. The Layer 2 Blockchain solutions are very helpful in improving the overall scalability of the transactions.
The transactions fees are lowered as the burden of transactions is removed from the main chain and hence the rest of the transactions that are processed on the main chain are less expensive.
Thanks for sharing the concept and good luck with your entry.
Cryptocurrencies as a whole has less transaction fees which is why the industry is growing everyday. Thank you for support.
Great job! Everything is accessible and understandable!
I agree with you that layer 2 is an additional layer to layer 1. It improves the Blockchain and solved the problems that the first layer couldn't handle like increasing the speed of transactions, reducing the cost. You are right by saying that it improves the capability of the system. It is like a helping hand to the on chain layer since this is an off chain layer. I wish you success
The functionality of layer 2 is very important to layer 1. Thank you for supporting me.
upvoted. Very well described. Keep participating dear.
Thank you.