Layer 1 vs Layer 2 refer to different layers in blockchain architecture that help improve scalability and performance. Layer 1 is the base blockchain, such as Bitcoin or Ethereum, where transactions are directly processed and validated. However, Layer 1 can face scalability issues as transaction volumes increase. Layer 2 solutions are built on top of Layer 1 to enhance speed and reduce costs, such as through sidechains or state channels. Layer 2 solutions help scale blockchain networks without compromising security or decentralization.
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