In the hunt of decentralization and rigidity, blockchain experiences scalability and agility problems. This event has a prescribed pull and is called the Decentralization, Consensus or Scale (DSC) or DCS Theorem. In other words, a blockchain can accomplish only two of the three characteristics in a distributed system. These are consensus, decentralization, and scale.
The significant problem encountered by blockchains is isolation. The kind of consensus-run distributed databases like Bitcoin and Ethereum is that all activity information is put on the blockchain and is robust. This suggests that all transaction data can be openly documented and cannot be modified or reconstructed in any way. This is crucial for obtaining decentralization but not fundamentally perfect for private or financial secrecy. Second layer scaling solutions are trying to solve this problem.
What is the Second Layer?
The second layer is the designs, platforms, and etiquettes that lie on the roof of field blockchain and attempt to make the technology stable. There are 4 classes of scaling explications that is being searched by the community. These are as follows:
- First Layer (On-Chain) Solutions
- Second Layer (Off-Chain) Solutions
- Consensus mechanisms
- Scalable Distributed Ledgers
This post is explaining the Second Layer (Off-Chain) Solutions.
Second-Layer Off-Chain Solutions
The second-layer off-chain scalability solutions apply to subsidiary etiquettes developed on top of the principal blockchain where transactions are ‘off-loaded’ from the principal blockchain to conserve area and decrease network bottleneck. Second-layer solutions are normally in the order of side-chains and state-channels.
The Lightning Network is a “second layer” payment custom that runs on a Bitcoin blockchain. It allows immediate transactions between competing nodes and has been promoted as an answer to the bitcoin scalability difficulty. It highlights a peer-to-peer method for executing micropayments of cryptocurrency through a network of payment channels without transferring administration of reserves and reducing the liability of third parties. As mentioned earlier, all payment transactions in the lighting network take place off the bitcoin blockchain. The predicted transactions per seconds: 1,000,000+ TPS.
Plasma is one off-chain scaling solution for the Ethereum blockchain that applies ‘child chains’ that arise from the parent blockchain. Each child chain operates as a different blockchain that concocts its private transactions yet depending on the defense of the principal chain. Since every child chain works separately and works identical to each other, speed and performance is optimized. In extension, every child chain can have an individual collection of rules and conditions. This suggests that it can be built for a processing particular transactions like privacy-focused transactions while still performed in the corresponding protected environment. The predicted transactions per seconds: Infinite TPS.
Trinity Network is another off-chain solution developed on the NEO blockchain. Trinity is comparable to Lightning Network and Raiden Network. Trinity utilizes state carriers to develop blockchain throughput, concentrating on real-time amounts, privacy safeguard and moderate fees for NEO assets. The predicted transactions per seconds: Infinite TPS.
The major constraint of blockchains is scalability. In other words, it is difficult for blockchains to develop and carry rising numbers of transactions. In order to reflect this, Visa can concoct many transactions per second while Bitcoin can only process almost 7 transactions per second. It is obvious that explications must be presented to improve the capacities of blockchains.
Disclaimer: This information should not be interpreted as an endorsement of any cryptocurrency. It is not a recommendation to trade. The crypto market is full of surprises and overhyped assets. Do your research before buying anything. Do not invest more than you can afford to lose.