The state of Layer-1 and Layer-2 Blockchain Scaling
date
Jun 8, 2023
slug
the-state-of-layer-1-and-layer-2-blockchain-scaling
status
Published
tags
blockchain
blockchain-scaling
summary
Blockchain scalability presents challenges with increased adoption, resulting in congestion, high fees, and limited throughput. This article aims to provide a comprehensive list of feasible scaling solutions and track the latest developments in this area.
type
Post
This article will be regularly updated to reflect the current state of the blockchain development community
Scalability poses a significant challenge for blockchain technology, especially as the network experiences increased adoption and user participation. This surge in activity often leads to network congestion, resulting in competition for transaction validation, higher transaction fees, and limited transaction throughput. To make blockchain technology viable for real-life applications, optimal scaling solutions are essential.
There are two primary approaches to addressing scalability:
Improving the blockchain itself
Developers can increase the block size to improve the transaction capacity of the blockchain, allowing blockchain blocks to handle a higher number of transactions. This adjustment potentially improves the overall throughput of the blockchain. However, it requires more storage space and network bandwidth for storing and communicating between nodes, leading to only nodes with sufficient resources being able to participate in the network. This situation can undermine the decentralized nature of the blockchain.
Layer-2 solutions
Alternatively, rather than doing everything on-chain, developers move most of the activities to the off-chain layer called layer-2, leaving the on-chain component primarily focused on crucial settlement tasks such as withdrawals and deposits. This approach reduces the burden on the main blockchain, increasing scalability without compromising decentralization.
Implementing layer-2 solutions offers the advantage of improved transaction throughput and reduced congestion, as the majority of activities occur off-chain. This enables blockchain technology to support real-life applications more effectively.
