Understanding the architecture of blockchain technology is essential for grasping how digital assets and information traverse the diverse landscape of distributed ledgers.
Layer 2 solutions were conceptualized to address the limitations in scalability and transaction throughput that Layer 1 blockchains face. Operating atop the base layer, these solutions aim to enhance the network's capacity without compromising its security or decentralization. The consensus mechanism, a core feature of Layer 1, is the process by which the network agrees on the state of the blockchain, ensuring the integrity and immutability of the transaction data.
Among the diverse array of Layer 2 solutions, some notable examples include state channels, which allow participants to conduct transactions with each other outside the main chain, only settling on the base layer when necessary. Rollups are another innovative approach, aggregating multiple transactions into a single one to reduce the load on the main network.
Blockchain bridges enable the transfer of tokens and cryptocurrencies between Layer 1 and Layer 2 and facilitate data sharing, which is crucial for maintaining the continuity and integrity of operations across networks. They provide the infrastructure necessary for Layer 2 solutions to thrive by leveraging the security and decentralized nature of Layer 1 blockchains.