✅ Primary Function
🎯 Layer 1: Foundation of blockchain networks.
🎯 Layer 2: Built on top of Layer 1 to enhance scalability and efficiency.
✅ Processing Transactions
🎯 Layer 1: Handles transactions natively on the blockchain.
🎯 Layer 2: Processes transactions off the main chain to reduce congestion.
✅ Scalability
🎯 Layer 1: Scalability improvements involve changes to the protocol itself.
🎯 Layer 2: Increases scalability without altering the base layer.
✅ Security
🎯 Layer 1: Security is integral, maintained by the network's consensus mechanism.
🎯 Layer 2: Leverages the security of Layer 1 but requires additional measures to ensure integrity.
✅ Examples
🎯 Layer 1: Bitcoin, Ethereum.
🎯 Layer 2: Lightning Network (for Bitcoin), Optimistic Rollups, zk-Rollups (for Ethereum).
✅ Cost
🎯 Layer 1: Can have high transaction fees due to network congestion.
🎯 Layer 2: Generally offers lower transaction costs by handling transactions off-chain.
✅ Speed
🎯 Layer 1: Transaction speed is limited by the block time and network congestion.
🎯 Layer 2: Provides faster transaction throughput by offloading the work from the main chain.
✅ Development Complexity
🎯 Layer 1: Requires in-depth protocol knowledge and broad consensus to update.
🎯 Layer 2: Developers can innovate more freely, often without needing broad network consensus.
✅ Use Cases
🎯 Layer 1: Ideal for secure, decentralized transactions and settlements.
🎯 Layer 2: Suitable for micropayments, gaming, and quick transfers.
✅ Upgradeability
🎯 Layer 1: Upgrades can be challenging and require network-wide agreement (forks).
🎯 Layer 2: Solutions can be upgraded with less friction and without impacting the underlying blockchain.
✅ User Experience
🎯 Layer 1: May face challenges with slower transaction times and higher fees.
🎯 Layer 2: Often focuses on creating a smoother user experience with fast and cheap transactions.