Layer 2 Blockchain is a kind of secondary protocol or secondary framework while layer one is that which built on the top of main blockchain. If we talk about layer 1 then it is responsible for making foundation of the blockchain and handles core functions like validation of transactions etc but if we talk about layer 2 blockchain is it responsible for providing security, scalability solutions and enhancement for efficiency of performance of blockchain.
Layer 2 is considered more advanced in a sense that it address some of the issues and limitations of layer one which include low transactions speeds and high fees for transaction. Overall functioning of layer 2 involves in the improvement of scalability and transaction speed and reduction in the cost of transactions.
Different types of layer 2 solutions are below.
- State channels protocol.
- Side channels protocol.
- Off channel protocol.
If there is a user who want to conduct of chain transactions then state channel protocol is a responsible for giving these users permission to do this and these transactions are recorded at blockchain where this channel is closed. Cheaper and faster transactions are done by State channels and state channels also reduces burden at main blockchain.
A protocol which operates parallel to the main blockchain is called side chain protocol and it also allows users for making their transactions more faster and scalable but it have its own consensus mechanism as well as its own rules and this is a protocol that interact with main blockchain through two way pegs so in this way assets are transferred between main chain and side chain.
For creating payment channels where multiple transaction could be conducted off chain , off chain protocols are used.At main blockchain final outcome of transactions are recorded in off chain protocol so in this way it also improves scalability and help in reducing fees of transactions.
I am explaining some of the real word examples of layer two solutions and I am also explaining their working here.
1. The Lightning Network (Bitcoin):
Lightning network is layer two solution for Bitcoin. This is a layer two solution which is responsible for the maintenance of scalability issues by increasing the speed of transactions and making them cheap and its working is through off chain payment channels in between users and these payment channels permit users so that they may conduct multiple transactions without recording each and everyone at main blockchain of Bitcoin because in this case only final outcome is recorded at main blockchain of Bitcoin.
How it works
Ali and Ahmed are two users that want to conduct multiple transactions in between them so for this they have to open a payment channel by the creation of multi signature wallet at Bitcoin blockchain and then its up to them that how many transactions they want to conduct ,they can as they want off chain, updating the balance within the channel. When they would be finished then they would close this channel and the final outcome would be recorded then at Bitcoin blockchain.
2. Plasma (Ethereum):
A layer 2 framework is plasma that is used for Ethereum blockchain for the purpose of increasing scalability by the creation of interconnected side chains. These side chains are known as plasma chains that are independent in their working but they are connected to Ethereum mainnet. Transactions are processed in more faster and in parallel ways at plasma chains that in turn reduce congestion at main Ethereum blockchain network.
How it works:
Again suppose that there are two users Ali and Ahmed and they want to use a decentralized application at plasma chain.He submitted or deposited his Ethereum tokens into a small contract at Ethereum mainnet, who respond to create a balance at plasma chain.Ali can now interact with decentralized application at plasma chain for the conduction of transactions at high speed and at low fees so when he would want to exit plasma change and want to move his tokens to Ethereum mainnet then plasma chain operator would verify the final state of plasma chain and then submit it again to Ethereum mainnet for it's settlement.
In reducing transaction fees at a blockchain and in the facilitation of interoperability between different blockchains layer two solutions play a significant role that I am explaining below in detail.
A significant part of transactions are moved off the main blockchain by layer two solutions. So in this way very few transactions need to be processed and need to be record at main blockchain which in turn reduce congestion and burden and cause to charge very little transaction fees.
You can add a similar example herr to understand this thing as I have explained above in the case of lightning network that is used in Bitcoin.
If we talk about interoperability between different blockchains then it is referred to the ability of different blockchains to allow communication and interaction of users with each other so if we want to understand it through an example then we can take the example of plasma network that is used in Ethereum blockchain.
Through above examples we can easily understand that layer two solutions are responsible for the rejection of transaction fees by moving some of the transactions of the main blockchain which reduce congestion and makes transaction to be processed in a more faster way and in a more cheaper way as well as if we talk about facilitation in the interoperability then it is through making a bridge in between different blockchains that allow for more scalable transfer of different assets and data so it leads to a more efficient blockchain also.
Graphene is an underlying layer at which steem blockchain is built. This layer helps in the facilitation of transactions and also is very significant in the interaction of different users at this blockchain so let me explain everything about it in detail.
Graphene is an open source blockchain technology that is responsible for providing a framework for building decentralized application and for building platforms like steem.Graphene is well known because this is very scalable and efficient.
High transactions speed at steem by graphene
Graphene at steem blockchain is it responsible for making transactions at high speed and consensus algorithm that is used behind it is delegated proof of stake and block producers that are trusted delegates are responsible for the verification and validation of transactions rather than giving this opportunity to every participant in the validation and transaction at network. In this way over all time period required for consensus reduces and transactions proceeds in more faster way so in this way steem blockchain is able to handle multiple transactions within a second.
Transaction fees is also controlled by graphene by the utilization of delegated the proof of stake consensus mechanism, graphene limits the computational requirements and consumption of energy that is associated with validation of transactions so in this way it reduces the transaction fees and make it accessible to users.
Enhancement of interaction by graphene at steem blockchain
Graphene is also responsible for the support of small contracts which are self executing with predefined rules and regulations and they allow for automation of different processes to take place and automation of interactions to take place at blockchain so it permits developers so that they may create and deploy their small contracts at this blockchain and these contracts allow wide range of functions like reward distribution,curation as well as voting processes at this blockchain.
Graphene provides a robust infrastructure for the developers so that they may create and deploy DApps . It allow for creating different applications at this platform or at this blockchain which expand possibilities of users interaction with each other.Graphene also provides high level of security so with delegated proof of stake consensus algorithms it gives surety to block producers that they are responsible for their actions and this decentralized governance help to maintain integrity of the blockchain.
Integration of layer 2 solution at steem blockchain have some of the implications that I am explaining here.
- First implication is scalability because we all know that with a layer two solution like lightening network or state channels as I have explained above ,steem blockchain is responsible for the occurrence of multiple transactions and giving permission to more users to have good interaction at platform at same time so in this way it confirms more enhanced transaction speed and more smoother experience for every user.
- Second important implication is transaction fees and we all know that layer two solution is also responsible for the reduction of transaction fees by arrangement of multiple transaction into single at main blockchain so that users may save on fees. Users that use steem blockchain find it very affordable to make different transactions here as well as reduction in transaction fees helps in growth of this platform (Steem) by attracting more users towards it.
- Another important implication is smoothness in its use because we all know that layer two solution provides different transactions to be happen off chain so it means that there would be less waiting time for on chain confirmations so it would make user experience more efficient and smooth and in this way people can also interact with content, navigate with platform and connect with each other in a more easy way.
Integration of two layer solution definitely requires a very careful implementation and planning because compatibility and security at steem blockchain are most important things to be considered. If there is a new feature than it is very important to educate the users about it and if there is a proper education to user and proper development then this layer two solution can be very helpful in the enhancement of privacy ,security, reduction of transaction fees ,giving more smoothness to users to use steem blockchain.
Upvoted. Thank You for sending some of your rewards to @null. It will make Steem stronger.
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Fantastic breakdown of Layer 2 solutions ! Your clear examples like the Lightning Network and Plasma really help in Understanding the practical implications of these concepts the integration of Layer 2 Solutions on the Steem blockchain seem promising especially With the potential for increased scalability reduced costs and improved user experience. Best of luck in the Crypto Academy contest !
Great job on your comprehensive and informative post!
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TEAM 2
Congratulations! This post has been upvoted through Curation Team#2. We support quality posts , good comments anywhere and any tags.Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
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Thanks @fjjrg
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Saludos amigo khursheedanwar.
Buena participación, buenas palabras para explicarnos como las blockchain de capa 2 vienen a complementar y ayudar en las deficiencias que existen en la de capa 1.
Éxitos y bendiciones.
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Hello brother.
Layer 2 solution really helps users of a blockchain in many ways like improving scalability and reducing the transaction fees. You have explained in detail about every concept and I really appreciate your efforts. Your presentation is really good.
Great example given by you to explain about to explain about Lightning Network. Layer 2 solutions like State Channels play an important role in Lightning Network.
Great Post from your side. Best of luck for the contest.
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Hello bhai,
Apny is post ko aik nohat achy andaz me biyan kia ha or me umeed krta hun k ainda bhi ap is trha sy informative posts share krty raho gy. Layer 2 solutions ki bat krny sy mind me sab sy pehli chez scalability ki improvement ati ha.
Main chain jisy k hum layer 1 bhi keh skty hain, main focus Blockchain ki security, integrity, decentralization or transparency py krti ha jab k layer 2 ka main focus scalability ko increase krny or dosri chains sy communicate krna hota ha.
Is umdah entry k sath me apky liye, is contest me naik khwahishat ka izhar krta hun. Good luck 🌟
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Upvoted sure Thanks for describing Layer 2 block chain as "Layer 2 solutions like Lightning Network or State Channels can improve Steem's scalability, reduce transaction fees, and enhance user experience. Careful implementation and user education are key for their successful integration."
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Dejaste claro el rol que cumplen cada una de las capas de una manera muy sencilla para la compresión de todos. La escalabilidad es el principal problema a resolver pero no el único ya que la reducción de los costos y tiempo transaccional son tan importantes para la funcionalidad de la blockchain.
Las soluciones de Capa 2 ofrecen mejorar esas características como ya lo han hecho en BTC y ETH, así como siguen evolucionando cada día gracias a la flexibilidad con que son diseñados abriendo un mundo de posibilidades am ingenio humano.
Gracias por compartir. Te deseo mucho éxito.
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By moving a large part of the transaction off chain to attend to it before adding it back, cost is reduce and it will be faster. That is exactly what the layer two does, thus, freeing space to enable the layer 1 work faster. Yes, the Layer 2 is an additional layer that was built to complement layer 1. You have made a wonderful analogy that explains the Layer 2 very well. Your entry is easy to understand. I wish you success
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