One of these protocols’ key objectives is for major cryptocurrency networks to overcome the problem of transaction speed and scaling issues. What is a Layer 2 blockchain?Ī layer 2 framework or protocol is one that is developed on top of an existing blockchain system. And that’s not because some big celebrity is talking about it, but purely because of its revolutionary use case. But why?īefore we delve deeper, we must first take a look into why Polygon (Matic) is making headlines.
For the most part, Ethereum proponents have their eyes on Polygon. There have also been several major partnerships with significant corporations, both in the cryptocurrency industry and outside of it. Many Redditors believe that MATIC is a fantastic cryptocurrency that has the potential to develop much further in the future. Polygon, previously Matic, emerged as one of the most promising digital assets in 2021. It’s at this point that the modular approach and Layer 2 blockchains like Polygon come in handy. So, the crypto community has come to recognize that there is likely to be a need to discover a different mechanism for scaling blockchains in the future. These Blockchains will eventually become overburdened due to an increase in demand. However, even if these new blockchains can handle up to 100,000 transactions per second, this is not sufficient for large-scale applications. To increase the number of transactions per second, they’ve come up with a number of alternative methods, but they have often come at the sacrifice of network decentralization and security. In 20, more blockchains, including Solana, Binance Smart Chain, and Avalanche, were launched.
Transaction costs, which rise and fall in line with demand, are becoming increasingly expensive, and a single transaction may now cost upwards of $100.Īlthough various improvements to Ethereum are planned in the next few years, including the transition to Proof of Stake and the deployment of Sharding technology, these changes will help enhance Ethereum’s capacity, but it will not be adequate to operate decentralized apps that would be utilized by millions, even hundreds of millions of users in the future. Networks get overloaded when more decentralized apps try to trade concurrently. The Ethereum blockchain’s capacity does not allow for a high volume of transactions to be processed per second. Ethereum, as the market leader, has more weight than all of its competitors combined, and it appears to be unstoppable.Įthereum, however, has a major challenge to address, namely the issue of scalability. In addition, the number of users and the amount of money they have locked up on the networks has risen sharply. It’s an industry that has already seen tremendous growth in recent years, particularly in 2021, when new use cases like DeFi, NFT, Metaverse, and Gaming have begun to break through to the general public. It is likely that you’ve heard about Web 3.0 and are aware that the internet is on its way to a new decentralized revolution.ĭecentralized apps, or Apps, have a great opportunity to grow in the next few years in this environment. The views and opinions expressed within this post belong solely to the author. Note: This blog is written by an external blogger.