Layer two blockchain solutions aim to provide a solution to one of the biggest challenges facing blockchain technology, scalability. There is not enough capacity and speed on the main chain, especially for small and frequent transactions such as micropayments. For this reason, second-layer blockchains are being developed that run parallel to the main chain and can perform faster, cheaper and more flexible transactions.
Layer two blockchain solutions are independent blockchains with their own rules and protocols, while being compatible with the main chain. In this way, it reduces the heavy load of the main chain and increases the processing efficiency. Second-layer blockchains build a bridge between them and the main chain, leaving the security and verification processes to the main chain. Thus, second-layer blockchains only manage transaction volume and benefit from the reliability of the main chain.
Layer two blockchain solutions can be of different types. For example, second-layer blockchains, called sidechains, are blockchains that are separated from, but linked to, the main chain. Sidechains can offer different features than the main chain. For example, faster transaction confirmation, lower transaction fees or more advanced privacy options. Sidechains can be used by transferring a certain amount of cryptocurrencies from the main chain. These cryptocurrencies can be spent or redeemed on the sidechain.
Another layer two blockchain solution is a payment channel system called the lightning network. Lightning network provides instant and almost free transactions thanks to private channels opened between two or more users. These channels are connected to the main chain, but transactions are recorded on the main chain only when opening and closing the channel. In this way, a large number of transactions can be performed without tiring the main chain.
Second layer blockchain solutions increase the potential of blockchain technology and create new usage areas. These solutions, which are especially ideal for micropayments, play an important role in the future of blockchain.