Adsactly Crypto: Does Bitcoin Need A Second Layer?

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Ever since the first altcoin showed up and started to make noise about how far superior they are to Bitcoin, we've seen BTC come under attack and criticism. Every cryptocurrency wants its top spot and trying to eat into its market share and yet none have been able to dethrone the king of cryptocurrency. Bitcoin reminds steady; it grows consistently over time as it follows its algorithmic deflation to a T and nothing is going to stop it from getting there. Short of all the world running out of electricity and by then we may have far more significant problems to worry about than BTC.

Bitcoin is seen as a one-trick pony in the crypto space; all it does is secure transactions using the largest computational network in the world. Yes its slow, yes its expensive, but what it does offer is safety, security and decentralisation with no single point of failure and ample support as we can see through use and hash rate.

To have scaling problems you first need scale

People often point to the speed and cost as an issue that holds BTC back and offers up their project as a solution, but none of the alts have been battle-tested the way BTC has, and none of these alts have the decentration BTC has so they cannot claim to solve scalability. You first need to feel the pain of the problem before you can claim you have a solution.

Ethereum, the second-biggest network also running proof of work has also failed at the scalability test. To try and get past it, they are moving to "staking" as part of several processes to try and scale its network. This is a monumental operation and offers several challenges that cryptos world reserve currency shouldn't and would not be taking, BTC's most significant play is its decentration and security, and it cannot afford to sacrifice this for the sake of speed and cost.

The main protocal needs to stand not only to support BTC but EVERY single currency that has a trading pair between it, which is why BTC's security is so important. BTC is the world reserve currency of crypto, and it cannot be messed with on the core level.

The second layer

Bitcoin Second Layers

Image source: - cryptoknowmics.com

Why Bitcoin can't change

Trying to make trade-offs the way Ethreum does will bring with it new challenges, and you can pretend to ignore these trade-offs, but if exposed could hurt your network far more than what you gain. Bitcoin is based on the currency with the best defence, so far it's done well so why would you want to weaken its security for the sake of additional features, we can or cannot live without and have been living without for some time.

To validate many small transactions you would need to split off validations into smaller groups; Bitcoin cannot do this because it reduces the ability of the design of the network, to allow ALL validators a change to secure transactions.

If your network has faster transactions than BTC, it's most likely the case that not everyone is validating transactions and the validation process is not as robust as BTC.

The second layer

To maintain these fundamental properties of Bitcoin but offer new solutions, second-layer networks now exist, like the Lightning Network that allows you to work outside the main blockchain and then sync back with it whenever you are ready. The second layer acts as an "almost altcoin" where BTC has the freedom to do a lot of what altcoins are trying to solve but is 1 to 1 backed by every Satoshi on that second layer network. Instead of worrying about exchange rates with your crypto, you know its Satoshi you're using for your transactions.

Second layer solutions will bring with it not only faster transactions, cheaper transactions, but also confidential transactions and even smart contracts. These new layer solutions will make many of the popular altcoins obsolete over time if Bitcoins second layers begin to absorb these features and prove to do it better, cheaper and have the 1 to 1 Satoshi backing an altcoin cannot provide.

Have your say

Do you now understand the function of the second layer solution? What do you think of it?

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4 comments
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If the Lightning Network delivers on its promises, most generic cryptos designed to serve as payment systems or smart contract platforms will fall to the wayside and lose most of their valuation. However, application specific networks like Hive can still succeed.

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Totally agree with you and think what that would do for the network absorbing all the ineffective value sitting in these alt coins and pulling it back into BTC and then moving it to ALTs doing network variations BTC would not focus on like as you say HIVE.

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Although I don't know much about BTC, from what you say here, there are many benefits and gains that the second layer brings so its implementation would be a solution. Greetings

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It certainly going to make BTC far more user friendly and affordable and well not need all these dApps and weird chains anymore so I’m all for it, I’d rather use something tied to BTC it brings more confidence to projects too since they’ll be backed by the best crypto

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