This website uses cookies to ensure you get the best experience on our website

Crypto Explained: What is Layer-2?

Perhaps you have heard or seen this being floated around quite often this week. If you are keen, crypto fans talk about it more enthusiastically, especially regarding fees, scalability, and the vibe around better user experience. And they are almost always right.

Blockchain may be a technological tsunami. However, it is inefficient due to the redundancy the system relies on to function properly, giving it that censorship resistant and tamper-proof characteristic.

Due to this architecture, unless there are trade-offs, the network speed depends on that of the slowest node that makes up its consensus architecture. The problem is that crypto evolves too fast, and users aren't ready to wait. Neither can heavy dApp operators give up due to scaling issues.

As a result, Layer-2 is an innovative solution implemented by blockchain developers to scale the primary layer. In this untested arrangement that's now beginning to take root, transactions are lifted 'off-chain' to layer-2 processing base stations—more of protocols-- without compromising on security and censorship resistance. That means Layer-1—the primary chain—remains as the confirmatory chain that Layer-2 solutions would rely on.

By transferring transactions off-chain, the primary chain is relieved and can be infinitely scaled, subsequently lowering transaction fees and enhancing user experience.

For more interesting tips and facts visit our Education Centre.


Have Questions? 

We're available 24/7 to help you. You can email us, or send us a message on WhatsApp, Telegram or Messenger!

Risk Disclosure: Trading cryptocurrencies or any other financial instrument involves a significant level of risk and may result in a total loss of your investment. You should consider carefully whether investing in Bitcoin or any other instrument offered by CryptoAltum is appropriate to your financial situation. CryptoAltum only accepts deposits in Cryptocurrencies. By trading with CryptoAltum you acknowledge your understanding of this risk disclosure and your agreement with the Terms and Conditions.
  • Copyright Excel Innovations Ltd (CryptoAltum) 2020