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Get to know the terms Layer 1 and Layer 2 in Blockchain

Liputan6.com, Jakarta – When investing in crypto, there are several terms that crypto investors need to know. One of them is layer 1 and layer 2 crypto, so what do these two mean?

Reporting from the crypto exchange site Ajaib Kripto, Sunday (2/6/2024), technology blockchain layer 1 or layer 2 is a term in the world blockchain which is used as a reference to a technological architecture used on a network blockchain. Common examples, such as the network architecture relationship between polygon and ethereum or polkadot and parachain.

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Layer 1 or Layer 1 is a form of basic network that is commonly found today, such as bitcoin, Binance smart chain, or ethereum. Basically, the infrastructure used on the network blockchain Layer 1 can be used to validate and complete transactions without being based on other networks.

While Layer 2 is a blockchain separate built on top blockchain layer 1 to overcome network scalability problems.

Layer 1 includes updates such as changing the block size, consensus mechanisms, or dividing the database into parts (known as sharding).

Layer 2 includes rollup (bundling transactions), parallel blockchains (known as side chains), and off-chain transaction handling (known as state channels).

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Why Are Layer 1 and Layer 2 Scaling Solutions Important?

Blockchain is a decentralized network of nodes that process crypto transactions independently, with a consensus protocol that verifies the accuracy of transactions. These transactions are then recorded sequentially, forming an immutable data block chain.

Unfortunately, the more popular a blockchain becomes (Bitcoin is one example), the greater the processing power required to handle the increasing number of transactions.

Protocol blockchain Cryptocurrencies can also limit the number of transactions that can be processed, causing congestion in the network.

This causes popular blockchain networks to be very slow, sometimes taking up to 10 minutes (or more) to process a transaction.

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To address this issue, scaling activities have been developed to help provide a more efficient way to accommodate much larger transaction volumes.

There are several ways to scale each network, and dozens of scaling solutions have been developed for various popular blockchains. These solutions help move transaction processing power to other networks or improve the base layer network itself through code updates.

Disclaimer: Every investment decision is in the hands of the reader. Study and analyze before buying and selling Crypto. Liputan6.com is not responsible for profits and losses arising from investment decisions.

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Get to know the terms Layer 1 and Layer 2 in Blockchain

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