Chapter 10
Smart-Contract Platforms
IN THIS CHAPTER
Explaining layer 1 (L1) and layer 2 (L2)
Comparing (L1) base protocols
Exploring off-chain (L2) scaling solutions
Following the widespread adoption and soaring market values of Bitcoin and Ethereum, many new blockchains have spawned to address the inefficiencies that come with these old-school protocols. With promises to achieve greater throughput and faster transaction times, a common theme across these scaling solutions is the collective shift from proof-of-work (PoW) to proof-of-stake (PoS). Another trend is the rise of so-called layer 2 off-chain (or, more accurately, off-layer-1) scaling solutions.
- Layer 1 (L1) refers to the base blockchain. Bitcoin and Ethereum are examples of L1 blockchains.
- Layer 2 (L2) refers to an off-chain scaling solution whose transactions are ultimately reconciled and secured on the L1 protocol it was designed to scale. These L2 scaling solutions come in many different shapes and sizes, each with their own advantages and disadvantages.
No solution has yet disproven the famous blockchain trilemma, which holds that in trying to achieve scalability, security, and decentralization, one feature must ...
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