Layer 1 vs Layer 2 refers to two types of blockchain solutions. Layer 1 is the base blockchain, such as Bitcoin or Ethereum, providing the foundational protocols and consensus mechanisms. Layer 2, on the other hand, is built on top of Layer 1 to improve scalability, transaction speed, and cost-efficiency. Solutions like the Lightning Network (for Bitcoin) and Optimistic Rollups (for Ethereum) are Layer 2 protocols that help reduce congestion on Layer 1 networks, enhancing overall performance.
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