Outcast,
Great Questions thanks for asking. I'll try and answer them in order, It may a few responses:
$this->bbcode_second_pass_quote('', 'q')uote="Outcast_Searcher...I'm not clear on what "crypto layered on BTC" is?
PeakOil is You
Collapse of FTX crypto Bank....a Lehman Moment?
Re: Collapse of FTX crypto Bank....a Lehman Moment?
by careinke » Fri 09 Dec 2022, 05:44:40
layer 1 is the base layer of a Block Chains infrastructure, it pretty much sets the rules, and records ALL transactions. It is basically the Truth of the blockchain.
Layer 2's increase the functionality of layer 1's usually to avoid congestion and increase speed.
I found this site which explains it in detail along with giving you a look at some of the biggest layer 1 and Layer 2 examples.
$this->bbcode_second_pass_quote('', 'I')f we playfully consider blockchain as the “it girl” of Web3, we’re curious to know — how does she do it all? The secret: layers.
Spanning two main types, layer 1 and layer 2, these interoperable networks work together to store, maintain and distribute information across digital decentralized databases that double as peer-to-peer, immutable public ledgers.
Here, we peel back each layer of a blockchain’s makeup for a closer look at their design, purpose and utility.
Layer 1 is the fundamental base network of a blockchain platform. It executes all on-chain transactions and therefore acts as a public ledger’s source of truth.
Processing a transaction, for most networks, consists of logging a user’s cryptocurrency wallet via asymmetric key pairs and its corresponding coin or token balances. The deal passes through a consensus mechanism — which will be distinct to each platform — to verify and finalize the trade or sale. Additionally, layer 1 blockchains host their own native token, which is used to cover transaction costs, or gas fees.
Determining which consensus mechanism is fit for a platform comes down to a trade-off between three main features: security, scalability and decentralization. This compromise is commonly referred to as “the blockchain trilemma,” a concept originally identified by Ethereum co-founder Vitalik Buterin. Whatever isn’t fully covered by layer 1 protocols — typically scalability — can be compensated for in the layer 2 protocol built on top of it (more on that later), serving as an extension to the mainnet’s functionality.
Layer 1 Blockchain Examples
The following list is composed of top layer 1 blockchain networks that power the majority of decentralized applications, or dApps.
Bitcoin: Bitcoin’s layer 1 is the underlying architecture that secures the world’s largest cryptocurrency, top ranked with a live market cap of $367 billion. It operates on a proof-of-work consensus mechanism, which verifies new blocks via an algorithm that uses an computationally-intensive, cryptographic puzzle. Bitcoin is widely considered to be the most secure, decentralized platform — but processing one transaction can take 10 minutes to an hour.
Layer 2 consists of any overlaying network built on top of the mainnet, the layer 1 foundation supporting a blockchain. Typically, layer 2 protocols are optimized for reducing network congestion, lightening the load and increasing throughput of the mainnet. They were created to prevent overdependence or collapse of its layer 1 counterpart. As consensus mechanisms are the defining characteristic to layer 1, so are scaling solutions to layer 2.
While layer 1 chains are the primary security provider within the context of decentralization, layer 2 chains have their own security, but to a far lesser degree, explained software engineer Arie Trouw, who holds over a decade of experience in the blockchain space.
“Layer 2 solutions provide enough security for dApp usage as an alternative to layer 1. They support some or all of the dApp’s functionalities, mimicking the mainnet,” said Trouw, who is also the co-founder of XY Oracle Network, a blockchain protocol currently building a data marketplace-in-the-making. “This allows for bridging between the two layers.”
Layer 2 Blockchain Examples
Lightning Network: Used to support Bitcoin’s main network, this layer 2 addition helps facilitate speedy transactions during heavy traffic — which can take hours — on separate chains independent to the mainnet, reporting the final balance on layer 1 at a calmer time.
and the link:
https://builtin.com/blockchain/layer-1-blockchain
$this->bbcode_second_pass_quote('', 'A')re you talking about BTC forks (and forks of forks, etc) or something else?
Something else.
Forks AKA sidechains are a different beast. Forks happen when enough miners support them to break off from the layer 1. Interestingly enough if you own BTC and it forks, you own the same amount of the forked coin as you owned in BTC. Except if the BTC is on an exchange, the exchange may decide to keep the forked coin! (Not your Keys, Not your Crypto).When BCH forked I automatically got the same amount of BCH as I was hodling of BTC. To me forks are like dividends.
A LOT of people dump their forked coin and buy more BTC with it. It's a good idea to let things settle down before buying a forked coin.$this->bbcode_second_pass_quote('', 'q')uote="Outcast_Searcher"] Etherium a scam? If so, why? (And I understand that you don't like proof of stake -- I have similar issues with that re long term security / confidence in a given crypto using that). Etherium seems to be in the same overall level as BTC in terms of popularity / network size, having futures, and having earned a degree of user confidence, as I understand it.
ETH originally started as a POW coin, actually it still is as the transition is not complete. When it is done, ETH will become a security and not an Asset. As a security they are breaking multiple laws according to the SEC head. All in the name of greenwashing. The founder did not think it all the way through.
ETH serves a valuable function right now and I don't see it going away for a couple of years. It makes a nice place holder as more bitcoin apps are developed to replace it.
Which brings us to the next issue Energy/environmental issues:
$this->bbcode_second_pass_quote('', 'q')uote="Outcast_Searcher" Given the huge energy needs required for proof of work, speed constraints on the system, etc, isn't that a big problem in a world in a big green energy surge to fight AGW?
You really need to give this one up. Frankly, you have been lied to. I found a guest article in Bitcoin Magazine showing BTC energy use is basically a rounding error compared to other major industries including: Gold mining, finance, military, construction, transportation, health care, etc. He also breaks them into subcategories.
He went to a lot of work getting the data and acknowledges where the data may have problems. Here is his conclusion and a prediction.
$this->bbcode_second_pass_quote('', 'A') few caveats: The above figures are not mutually exclusive — in practice, the all-encompassing building and construction sectors’ energy use is spread out to most other sectors, as is the case with the various transportation sectors. Many of the above figures are reverse engineered from a raft of “authoritative,” yet contradictory, sources.
The main takeaway should be that Bitcoin is a rounding error in the global scheme of things, and from a carbon-intensity point of view, has significantly less emissions per kilowatt than finance, construction, healthcare, industry or the military, and will only improve further in time. My prediction still stands: Bitcoin’s carbon intensity will go from 280 g CO2 per kWh today, to around 100 g in 2026, and zero by 2031, and maybe, finally, we’ll be done with this debate.
This is a guest post by Hass McCook. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
https://bitcoinmagazine.com/business/bitcoin-energy-use-compare-industry
So I ask you to please, please, read the article, look at the data, and tell me where you think he is wrong. Let's put this one to bed.
For the rest of you, this article is a great resource for CO2 emissions and annual energy consumption.
$this->bbcode_second_pass_quote('', 'T')hat's why I'm not convinced the whole crypto thing actually offers much net, given how well modern chipped credit cards handle daily global transaction loads with reasonable security just FINE (if one can live with banks, which I think we can, as long as there is proper regulation, auditing, etc).
Unless you are a: protestor, Canadian trucker, a citizen of most any country, the government can take it away from you easily. Also you do know the transaction is not really complete for about three days? Money should be sovereign along with Human Beings.
$this->bbcode_second_pass_quote('', 'N')ot arguing here -- trying to clarify your points in my mind.
(If everything except BTC is a scam, given the efficiency and speed issues of BTC, that's a big cunundrum, IMO, re crypto being likely to become really huge, much less take over, it seems to me).
BTW, I still think blockchain, over time, could be a VERY big thing in certain areas -- but cryptocurrencies are just one application of those.
