by GalaChain | Sep 20, 2024 | Web3 Explainers
Layer 2 (L2) blockchains are solutions built on top of an existing Layer 1 (L1) blockchain (like Ethereum) to improve its performance. In simpler terms, if the blockchain was a road, Layer 1 would be the main highway, and Layer 2 would be like a smaller, parallel road built to ease traffic on the highway. The goal of Layer 2 chains is to make transactions faster, cheaper and more scalable.
Why Do We Need Layer 2?
Blockchains, especially popular ones like Ethereum or Bitcoin, often face issues like slow transactions and high fees when too many users are trying to make transactions at once. This is because every transaction has to be processed by all the computers (or “nodes”) in the network, potentially slowing things down and making performance inconsistent.
Layer 2 chains help solve this by processing transactions separately from the main blockchain, reducing the workload on Layer 1. Once the transactions are bundled or “rolled up,” they are sent back to the main blockchain, significantly speeding up the process.
How Do Layer 2 Solutions Work?
Layer 2 solutions relieve some of the main blockchain’s burden, allowing users to conduct transactions without congesting the main network. Here’s a breakdown of how this works:
- Transaction Bundling: Multiple transactions are grouped together.
- Processing Off-Chain: These transactions are processed “off-chain,” meaning they don’t happen directly on Layer 1.
- Settlement on Layer 1: After processing, the result of these transactions is sent back to the main blockchain, reducing the load.
An easy analogy would be an amusement park with long lines for rides (the Layer 1 blockchain). Layer 2 would be a fast pass line that processes smaller groups more quickly, then checks them in with the main system.
LEARN MORE:
“What is a Layer-2 Blockchain?” – CoinBureau, October 2023
Examples of Layer 2 Solutions
Polygon (formerly Matic): One of the most well-known Layer 2 solutions for Ethereum, Polygon uses a technology called “sidechains” to help Ethereum scale. Polygon runs alongside Ethereum, processes transactions off-chain and then updates the Ethereum blockchain with the results.
Arbitrum: This uses a method called “rollups” to bundle transactions together, verify them off-chain and then submit the summary to Ethereum. It helps reduce costs and speed up transactions.
Optimism: Similar to Arbitrum, Optimism uses rollups to bundle transactions and reduce the cost of using Ethereum while keeping the security benefits of Layer 1.
Why is Layer 2 Important for Web3?
In the Web3 world, where decentralized applications (dApps), smart contracts, and DeFi (decentralized finance) platforms are booming, scalability and low transaction costs are critical. If users have to wait a long time or pay high fees every time they want to interact with a blockchain, mass adoption becomes much more challenging.
Layer 2 solutions are important because they offer:
Scalability: More transactions can be processed, allowing blockchains to handle millions of users at once.
Reduced Costs: Since fewer transactions are processed directly on Layer 1, the fees (often called “gas fees”) can be significantly lower.
Faster Transactions: Moving some of the work off-chain means transactions can often happen in seconds or minutes instead of hours.
Layer 1 vs. Layer 2 and Beyond
- Layer 1 (L1): This is the foundation, or main blockchain, like Ethereum, Bitcoin or GalaChain. It provides the most security but often struggles with speed and high costs as it grows in popularity.
- Layer 2 (L2): These are secondary systems that sit on top of Layer 1 and help by processing transactions faster and more efficiently without compromising too much on security.
Think of Layer 1 as a big city with traffic congestion. Layer 2 is like a fast train running above ground to take people out of the crowded streets and speed up their commute. The existence of this train benefits not only the riders of the train, but the car commuters as well, who can then enjoy less congested streets below.
LEARN MORE:
“Layer 3 Blockchains: What They Are and How L3s Improve Scalability” – CoinGecko Guides, November 2023
Layers are Key to Blockchain’s Future
In a world where blockchain usage is growing daily, the technology needs to scale quickly. Layer 2 solutions are not just an option but a necessity for the future of Web3. They ensure that decentralized platforms can function smoothly without making users deal with high fees or slow transaction times.
With the rise of popular Layer 2 solutions like Polygon and Arbitrum, users can look forward to a blockchain world where interacting with decentralized apps and services is as seamless as using traditional web apps—fast, cheap, and scalable.
GalaChain is a Layer 1 blockchain with the potential for integrated Layer 2 systems. Once the GalaChain ecosystem is used by enough external developers and users, organization will be streamlined through the use of multiple layers.
by GalaChain | Sep 20, 2024 | DevSpeak
Welcome back to another edition of DevSpeak! In this series, we’re all about filling you in on the basics of terms you’ve probably heard tossed around in tech circles without fully understanding what they mean. Today, we’re diving into one that’s been around a while but is still causing its fair share of confusion – cloud computing!
Imagine you’re organizing a huge event. You could either buy everything yourself—chairs, tents, catering equipment—or you could rent all of these items for the day, using them only as long as you need, and then return them. This is more or less how cloud computing works for businesses and individuals in today’s world.
Cloud Computing, Defined
At its core, cloud computing is the delivery of computing services such as storage, processing power, databases, and software over a shared connection, often referred to as “the cloud.” Instead of owning physical hardware or software on your premises, you access and use these resources online, typically through a service provider like Amazon Web Services (AWS), Microsoft Azure or Google Cloud.
Think of cloud computing like using electricity. You don’t need to own a power plant to run your lights, fans, or electronic gadgets. You simply plug into an outlet and pay for the amount of electricity you consume. Similarly, cloud computing lets you “plug into” vast computational resources and only pay for what you use without owning any of the underlying infrastructure.
While this cloud connection typically happens over a standard internet connection, providers typically create permissioned and secure ways to access resources.
The Silver Linings of the Cloud
There’s lots of ways that the idea of the cloud has been amazingly beneficial in people’s lives. We often don’t even think about all the ways we interact with cloud services today, even though many things we do are facilitated by cloud computing under the hood.
Cost Efficiency
Using the cloud means you may not have to buy expensive hardware or software upfront.
Imagine a startup needing 100 powerful servers for just one week to run some tests. Buying 100 servers would be incredibly expensive, and those servers might sit unused afterward. Instead, they can rent these servers in the cloud for the short time they need them and save a lot of money.
Scalability
Let’s go back to our party example. Oh no! More guests showed up than expected! You’ll have to scramble for more chairs, tables, and food.
In traditional computing, if your website traffic unexpectedly spikes, you’d need to buy more servers – expensive and time consuming. With cloud computing, however, resources can scale automatically. If your needs grow, you can instantly be allocated more computing power or storage from the cloud. Similarly, if traffic drops, you only pay for the reduced amount of resources used without having bought extra servers you don’t need anymore.
Flexibility
When all the tools are yours, your flexibility is limited to your toolkit.
Cloud computing allows businesses to be flexible in how they use their resources. If your project requires more computational power for a short period, you can ramp up easily without complicated logistics. If you need less, you can scale back. No long-term commitments are required, and there are enough cloud providers out there that they have an interest in keeping their customers happy.
Accessibility
Physical servers are in a place, and setting up secure ways to access your resources anywhere you want is complicated and a potential security risk. The cloud is already set up for this.
The cloud allows you to access files and applications from anywhere in the world, as long as you have an internet connection. No matter where you are, you can access the tools you need.
The Darker Side of the Cloud
While cloud computing has plenty of benefits, it’s not without its downsides.
Security and Privacy Concerns
When you rent something, you don’t have full control over it. You have to trust whoever does have full control over it.
When you store your data on someone else’s servers (in the cloud), there’s a risk of breaches or data leaks. While cloud service providers invest heavily in security, they can still be targeted by hackers. Not all cloud services are equal – look carefully at the ToS on a cloud provider and make sure you’re comfortable with the level of access they themselves have to your data.
Downtime and Outages
Back to the party example — delivery truck is stuck in traffic. Nothing you can do. You’ll have an event without seating for a while.
Even large cloud providers experience outages. If their systems go down, you could lose access to your tools and resources. It’s worth noting that they typically will know what they’re doing and work hard to fix problems. Being out of control can be hard, however, and with cloud services you’ll have to accept that there may occasionally be issues that are out of your hands.
Ongoing Costs
While renting might save you money upfront, long-term rental fees can add up. For some businesses, using the cloud can become more expensive over time than buying your own resources.
Cloud services do what they do because they’re trying to make money. Expanding your own infrastructure can save you money in the long run, so it’s important to make sure that cloud computing you use is mutually beneficial.
Vendor Lock-In
One more visit to the party example. Let’s say that delivery truck does show up, but they brought double the tables and no chairs! At this point, it’s tough to get another truck from another company out there without sending away the one that has the rest of your party supplies… even if minus chairs.
Switching between cloud providers isn’t always simple. Each provider has different systems, and moving your applications and data from one to another can be time-consuming and costly. It’s best to do research on any cloud provider you work with an ensure that you’re pretty likely to be happy with their service.
Parting the Clouds
Cloud computing has revolutionized the way we think about accessing and using digital resources. By making powerful tools available over the internet, the cloud has changed the way both businesses and individuals interact with the digital world. However, like any technology, it comes with trade-offs – just because something can be handled on the cloud doesn’t mean it always should.
Much like renting versus owning, cloud computing allows companies and individuals to use what they need when they need it, without the hefty upfront cost. The functionality that these services have unlocked across the whole of the internet has opened up new ways to build, collaborate and navigate life.
That’s it for today, but we’ll be back soon with another DevSpeak!
