Previously, we looked at layer-1 scalability techniques. Today, let’s read about layer-2 scalability techniques, namely:
- Payment Channels
Sidechains are side blockchains that are linked to the main base blockchain. The most well-known example of a sidechain is SegWit or Segregated Witness. SegWit removes the bulky signature data from the main chain and stores it in the sidechain, creating more space for more transactions.
Payment Channels, like Bitcoin’s Lightning Network, are another form of layer-2 scalability. Again, the idea is pretty straightforward. Instead of Alice and Bob directly interacting on the Bitcoin blockchain, they interact multiple times in the lightning network before adding the final state of transactions to the Bitcoin blockchain.
“Rollups” is a layer-2 scalability solution. It moves the complex computation off-chain from the core blockchain to layer-2. There are two kinds of rollups – Optimistic Rollup and Zero-knowledge Rollup.
If you want to know more, then click the “Savvy” button above. If you want a deeper dive, click on “Genius.”