With over $3.5 Billion in market cap at the time of writing, Bitcoin Layer 2s have become one of the hottest things and will almost certainly be an important driving force behind the current cycle. With Bitcoin more relevant than ever, let’s take a look at what Bitcoin Layer 2s are and why they are so hot!

What are Bitcoin Layer 2s?

Bitcoin Layer 2s are Layer 2 solutions that aim to either solve problems with the Bitcoin network or to build on top of the Bitcoin network while adopting certain aspects like security. Bitcoin Layer 2s often have far better flexibility and efficiency and highlight the enormous ecosystem that the Bitcoin network was able to establish over the years.  For more on what the different layers of blockchain are, read our past article.

To expand on the Bitcoin landscape, Layer 2s have taken center stage as more and more eyes are falling on Bitcoin. Let’s look at why Layer 2s are gathering so much attention.

Looking at Bitcoin’s Problem

Bitcoin has become a household name. With a market cap exceeding $1 trillion, it can’t be argued that Bitcoin is the biggest digital asset right now. But when looking at Bitcoin as a chain, a lot is left to be desired. The obvious problems with the Bitcoin network are heavily connected to the blockchain trilemma, especially noting high costs, low efficiency, and low overall speed.

Simply put, the Bitcoin network is too slow and costs too much. With an average throughput of only seven transactions per second (TPS), the tech itself looks almost primitive when compared to other networks. Facing this problem, many have been turning to other networks or, as suggested by our topic today, to Layer 2s

Are Layer 2s the Solution?

Layer 2 solutions are third-party networks that are anchored to Layer 1s to ease the load while still tapping into the fundamental core features of the base layer. They allow for the base network to tackle the scalability issue, which in Bitcoin’s case, is the biggest problem.

Layer 2s can and has helped solve the blockchain trilemma for a while. Other Layer 1s like Ethereum have used Layer 2s solutions for a long time, and while Bitcoin has had Layer 2 networks as early as 2018, their prominence has risen in the past year or so. Let’s take a look at the meteoric rise in popularity of Bitcoin Layer 2s.

Recent Rise of Bitcoin Layer 2s

For those that frequent the space, Bitcoin Layer 2s like Lightning Network, Rootstock, and Stacks have been around for a long time and are well-known names. These projects each have their approach to tackling Bitcoin’s problems, but while they were always prominent to a certain extent, real attention on Bitcoin Layer 2s blasted off in the past couple of years. This can all be attributed to a couple of things:

Taproot and Ordinals: Since 2021, many upgrades and initiatives have been introduced to the Bitcoin network. Two upgrades or breakthroughs that helped Bitcoin Layer 2s blast off are Ordinals and the Taproot upgrade. The Taproot Upgrade in 2021 introduced privacy, efficiency, and smart contract capabilities to the network that got things rolling, and Ordinals helped continue that trend by offering the potential to further enhance transaction capabilities.

Bitcoin ETF and Halving: While not in direct connection to bettering Layer 2 creation or technology, recent attention on the Bitcoin spot ETFs and the Bitcoin Halving have brought a tremendous amount of attention to Bitcoin. This extra attention is backed by growth and profit expectations, and these expectations have helped push development for all things Bitcoin.

With constant upgrades to the network opening up new possibilities as well as recent milestones that have garnered more attention, Bitcoin Layer 2s have not only become more accessible and flexible, but they also still have plenty of room for growth.

With new Layer 2s popping up every other week, ones like Merlin or SatoshiVm, we can expect even more to come in the future. Keep your eyes locked on Bitcoin Layer 2s, and let’s see where they go!

About ThunderCore

​​ThunderCore is an EVM-compatible blockchain featuring a breakthrough consensus protocol, PaLa, allowing lightning-fast efficiency. With users in more than 100 countries, this blockchain emphasizes a growing global reach. ThunderCore offers a native currency, TT, and nurtures an innovative ecosystem within the TT Wallet mobile app.

What’s Next?

Exciting things are on the rise with the halving just behind us, and ThunderCore is also gearing up to evolve and innovate. ThunderCore might be cooking something up! Keep an eye out!