Layer 1 vs Layer 2 scaling: What’s the difference? | Connor Murray, Seamus Andrew | #LDNBlockchain23

Explore the fundamental differences between Layer 1 and Layer 2 scaling in blockchain, including the trade-offs between decentralization, security, usability, and trust.

Key takeaways
  • Layer 1 (L1) scalability issues arise from the fundamental limitations of the blockchain, such as block size and speed of transactions.
  • Layer 2 (L2) solutions, like Lightning Network, use off-chain transactions and allow for higher frequency interactions, but may not be as secure or transparent as L1.
  • L2 solutions introduce new scalability bottlenecks and may lead to issues with data integrity and validation.
  • Some argue that L2 solutions are not true to Satoshi’s original vision of a decentralized and trustless network.
  • The trade-off between L1 and L2 is between decentralization and scalability, with L1 prioritizing purity and security and L2 prioritizing usability and convenience.
  • Layer 1 is associated with truth, data integrity, and transparency, while Layer 2 is associated with trusted third parties and potentially compromised security.
  • The decision to claim a blockchain-based solution as Layer 1 or Layer 2 has significant legal and philosophical implications, as it defines the level of trust, decentralization, and control.
  • L1 and L2 are often seen as mutually exclusive, but in reality, they can coexist and be used together.