What are Layer 2 blockchains?

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Layer 2 blockchains are protocols that are constructed on top of existing blockchain networks (Bitcoin, Ethereum, etc.). They aim to increase scalability and enhance the speed of the underlying blockchain by offloading a part of the computing or transaction processing from the main chain, hence decreasing additional transaction costs.

Layer 2 blockchains are often considered a remedy to the scalability issues of blockchain networks since they permit larger transaction volumes and faster confirmation times without impacting the underlying main chain's security and decentralisation characteristics. They are used in a variety of applications such as non-fungible tokens (NFTs), decentralised finance (DeFi), gaming, and other services where low transaction costs and fast transaction throughputs are essential for user acceptance and usability. 

How Do Layer 2 Blockchains Operate?

Layer 2 blockchains often run independently of the main chain but depend on the consensus and security procedures of the main chain. They employ different approaches to offload computing and transactions off the main chain and further process them in an improved and flexible manner (state channels, plasma chains, sidechains, or rollups). 

The layer 2 solutions have the potential to greatly enhance transaction throughput, lower transaction costs, and improve the general blockchain user experience. 

Why are Layer 2 Blockchains Important? 

Overall, layer 2 blockchains are important because they offer scalable, user-friendly, and cost-effective solutions to some of the key challenges facing blockchain networks, driving wider adoption of blockchain technology and fostering innovation in the industry. Layer 2 blockchains are crucial for many reasons. They have been illustrated below:-

  • Scalability: This is one of the major issues for many blockchain networks like Bitcoin and Ethereum. Layer 2 blockchains address this issue by outsourcing certain aspects of the computing or transaction processing away from the main chain, allowing for faster verification times and greater transaction volumes. This increase in scalability allows blockchain networks to accommodate an increase in users and transactions, making them feasible for practical applications requiring high transaction throughput. 
  • Reduce Transaction Costs: During high demand, there have been high transaction costs in various blockchain networks. Layer 2 blockchains can help ease this problem by processing transactions off-chain or sidechains and lowering the burden on the main chain, which results in cheaper transaction fees for users. Blockchain applications with Layer 2 can hence be made less expensive and appealing in the process. 
  • Enhanced User Experience: Layer 2 blockchains have the potential to significantly enhance the user experience of blockchain-based applications. Layer 2 solutions offer quicker and cheaper transactions. They help lessen the burden and transaction costs on the main chain and make blockchain-based services more accessible and user-friendly. 
  • Flexibility and Innovation: Layer 2 blockchains provide a flexible platform for blockchain development and experimentation. Developers may create and deploy their own layer 2 solutions, each with its own set of design options and trade-offs that enable optimisation and customisation for specific use cases. This adaptability supports creativity and a wide environment of layer 2 solutions, that promote innovation in this sector. 
  • Security and decentralisation: Layer 2 blockchains frequently depend on the main chain's protection and consensus methods, which gives a better level of security than some alternative off-chain options. This guarantees that layer 2 solutions monitor decentralisation and the unreliable nature of blockchain technology while striving to boost both speed and scalability.

Role of Layer 2 Blockchains in Cloud Computing

Layer 2 blockchains are not often employed in cloud computing applications, although they are gradually and steadily being accepted in cloud-based services. The following are a few possible applications for layer 2 blockchains in cloud computing:-

  • Layer 2 blockchains might be used to develop autonomous cloud storage systems where data is archived in a decentralised way, offering enhanced safety, privacy, and dependability. 
  • Layer 2 blockchains can be used to build decentralised markets or orchestrate cloud computing resources, thanks to their flexibility and compatibility. 
  • Layer 2 blockchains may have great potential in securing and authenticating data in cloud computing, whereby transactions relating to data exchanges or processing may be stored on the blockchain to provide consistency and end-to-end transparency.

It should be noted that the usage of layer 2 blockchains in cloud computing applications may vary based on the unique requirements, rules, and technical breakthroughs in the sector. To properly comprehend the potential effect of layer 2 blockchain application in cloud computing, more research and real-world implementations are being conducted.


We all know that blockchains are digital ledger technologies that cannot be manipulated or hijacked, however, layer 2 blockchains increase the safety and security features of blockchain networks even further. Layer 2 blockchains also help increase the speed and rate of transactions.

To summarise, layer 2 blockchains are important because they provide enhanced flexibility, security, confidentiality, decentralisation, connectivity, and affordability. In cloud computation, it is also being which may open up new possibilities for decentralised cloud computing applications and be beneficial to the industry's advancement.

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