Advancing Blockchain Scalability: An Introduction to Layer 1 and Layer 2 Solutions
Bitcoin's rise has put blockchain technology into the mainstream, amplifying its potential and broad utility. While Bitcoin has become incredibly famous, its transaction rate has not match such a corresponding increase. It still takes approximately 10 minutes to mine a block and add it to the chain. This limitation highlights the importance of seeking scale-up solutions that solve the low throughput transaction rates. Blockchain's consensus mechanisms make peer-to-peer transactions becomes feasible and effectively eliminate the need for centralized control. However, the decentralized systems also causes a lower speed and throughput compared to centralized networks as we mentioned Bitcoin's block creation rates. Two mainstreams scale-up solutions, Layer 1 scale-up and Layer 2 scale-up have been implemented to address these issues. Layer 1 level scalability enhancements happen at where traditional blockchain operates. This paper provides a deep examination of the components of the Layer 1 protocol and the scale-up methods that directly improve the lower level blockchain. We also address that Layer 1 solutions encounter inherent limitations although improvements were applied due to layer 1 storage costs and latency are high. In addition, we discuss layer 2 protocols, advanced scalability techniques, that elevate blockchain performance by handling transactions off the mainnet. Our findings indicate that Layer 2 protocols, with their various implementations such as rollups and channels, significantly outperform Layer 1 solutions in terms of transaction throughput and efficiency. This paper discusses these Layer 2 scaling methods in detail, aiming to provide readers with a comprehensive understanding of these protocols and the underlying logic that drives their effectiveness.
Authors
- Zhongche Qu
- Song Han (ORCID: https://orcid.org/0000-0002-1491-7675)
- Yihao Wei
Institutions
- University of Southern California (US)
- University of Illinois Urbana-Champaign (US)
- Columbia University (US)
Publication Details
- Published
- 2024-08-29
- DOI
- https://doi.org/10.1109/icsece61636.2024.10729396
- Citations
- 18
- Primary Topic
- Blockchain Technology Applications and Security
- Type
- article
- Field-Weighted Citation Impact
- 14.02