Layer 1 vs Layer 2 refer to different approaches to scaling blockchain networks. Layer 1, like Bitcoin and Ethereum, represents the base blockchain architecture responsible for security, consensus, and data storage. Layer 2, on the other hand, operates on top of Layer 1 and focuses on improving scalability and transaction throughput. Examples of Layer 2 solutions include the Lightning Network for Bitcoin and Optimistic Rollups for Ethereum, which reduce congestion and fees while enhancing the overall network performance.
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