Layer 1 vs Layer 2 refer to two types of blockchain architectures. Layer 1 refers to the base blockchain protocol, such as Bitcoin or Ethereum, responsible for transaction validation and data security. These blockchains have their own consensus mechanisms, like Proof of Work or Proof of Stake. Layer 2, on the other hand, refers to secondary solutions built on top of Layer 1 to enhance scalability, speed, and cost-efficiency. Examples include the Lightning Network for Bitcoin or Optimistic Rollups for Ethereum, which help reduce network congestion and transaction fees.
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