The data link layer is concerned with local delivery of frames between nodes on the same level of the network. Data-link frames, as these protocol data units are called, do not cross the boundaries of a local area network. Inter-network routing and global addressing are higher-layer functions, allowing data-link protocols to focus on local delivery, addressing, and media arbitration.
Transmission Control Protocol (TCP) and User Datagram Protocol (UDP) are two of the most well-known protocols in Layer 4. ARP is conventionally considered part of Layer 2, but since IP addresses don’t exist until Layer 3, it’s also part of Layer 3. Routers store all of this addressing and routing information in routing tables. Typically there is a maximum frame size limit, called an Maximum Transmission Unit, MTU. Jumbo frames exceed the standard MTU, learn more about jumbo frames here.
State Channels keep all transactions within them off-chain, only reporting the opening and closing balance of participants to the main network when the channel closes. Thus, participants can make repeated transactions with bytecoin mining gpu bytom coin mining individuals or businesses without having to pay high fees for every single transaction. Layer 2 defines how data is formatted for transmission, how much data can flow between nodes, for how long, and what to do when errors are detected in this flow. Layer 2 blockchains offer higher transaction throughput and lower gas along with the security guarantees of the Layer 1 blockchain. So, layer 1 chains provide security through their distributed nodes while Layer 2 networks provide an off-chain framework for faster transactions and computation. With developers constantly seeking solutions to the big issue of scalability, broader application for blockchain technology seems inevitable.
What are the benefits of Layer 2 blockchains?
A key feature of rollups is that they perform off-chain execution of transactions. This means that layer-2 networks handle the processing of transactions, whether with another user or with a smart contract, on behalf of of the base blockchain. In conjunction with a smaller validator set with better hardware, this offers much higher throughput when transacting on the layer-2 network compared to the base blockchains. In simple terms, this means the blockchain needs to do less work and store less data for transactions that take place on a layer 2, leading to a lower total cost per transaction.
Why Layer 1 and Layer 2 Scaling Solutions Are Important
Some Layer 1 cryptocurrency blockchains have updated their code to increase the block size, allowing more transactions to be verified at a time, thus expanding the overall capacity of the network. For example, in 2022, Lightning users experienced a unique ‘unattributed payment routing’ failure due to a bug. They ended up interacting with faulty nodes as a result, without being aware of the problem for a long time. A sidechain is an independent blockchain with its own consensus mechanisms that connect to Layer 1 via a two-way bridge. This bridge is vital as it is what allows the transfer of assets between chains. Due to effectively being its blockchain, a sidechain can support other Layer 2 solutions on top of it.
For more information on the technology, risks, and trust assumptions of layer 2s, we recommend checking out L2BEAT, which provides a comprehensive risk assessment framework of each project. See how cross-chain solutions enable a new frontier of dApp functionality. Of course, this limited core functionality is one of Bitcoin’s key features, not a bug. This layer is responsible for data formatting, such as character encoding and conversions, and data encryption. Examples of protocols on Layer 5 include Network Basic Input Output System (NetBIOS) and Remote Procedure Call Protocol (RPC), and many others. TCP, a connection-oriented protocol, prioritizes data quality over speed.
Chainlink
Layer 6 makes sure that end-user applications operating on Layer 7 can successfully consume data and, of course, eventually display it. Because UDP doesn’t have to wait for this acknowledgement, it can send data at a faster rate, but not all of the data may be successfully transmitted and we’d never know. TCP explicitly establishes a connection with the destination node and requires a handshake between the source and destination nodes when data is transmitted. If the destination node does not receive all of the data, TCP will ask for a retry. A layer is a way of categorizing and grouping functionality and behavior on and of a network.
Generalized Layer 2 networks offer blockchain-like features with more scalability than the mainnet, faster transaction settlement, and lower fees. The most popular types of Layer 2 solutions are optimistic and zero-knowledge rollups. But there are also other types like sidechains and validiums that offer scalability similar to L2’s but don’t depend on the mainnet for security. The way out of this trilemma is Layer 2 networks, which can scale transactions and data computation without forgoing blockchain’s decentralization or security. And right now, the Ethereum layer 2 race is in full swing, constituting the most active Layer 2 ecosystem. Scalability is the ability of a system to handle increased load or traffic.
As somewhat independent networks, they introduce a new set of risks and challenges. Launched in 2018, the Lightning Network uses ‘state channels’ to enable microtransactions on top of the Bitcoin Layer-1. Applications will also control end-user interaction, such as security checks (for example, MFA), identification of two participants, initiation of an exchange of information, and so on.
- Layer 2s take the transactional burden away from the layer 1 allowing it to become less congested, and everything becomes more scalable.
- This is where we send information between and across networks through the use of routers.
- Layer 2 blockchains are crucial for the continued growth and success of the Ethereum network — boosting scalability by lowering fees & increasing transaction throughput.
- From there you can make instant payments to the supermarket as you would with a debit card.
In the Internet Protocol Suite (TCP/IP), OSI’s data link layer functionality is contained within its lowest layer, the link layer. The link-layer functionality was described in RFC 1122 and is defined differently than the data link layer of OSI, and encompasses all methods that affect the local link. Sharding is similar to database partitioning, which allows a blockchain database to be broken up into smaller parts so that transactions can be processed simultaneously. Unfortunately, the more popular a blockchain becomes (Bitcoin is a case in point), the more processing power it needs to handle its growing number of transactions.
For all major Ethereum L2s, fees are paid in the underlying chain’s currency ether. Generally speaking, a user will be able to do similar things on L2 that they would on L1, namely, sending and receiving payments and interacting with smart contract applications. In legacy networks, built before there were smart switches capable of supporting VLANs, the only way for two devices on separate Layer 2 Ethernet networks was to be routed between those two networks. Switches are one of the traffic directors on the network, and traditionally operate at Layer 2.
Chloe Tucker is an artist and computer science enthusiast based in Portland, Oregon. As a former educator, she’s continuously searching for the intersection of learning and teaching, or technology and art. Reach out to her on Twitter @_chloetucker and check out her website at chloe.dev.
Lower fees
It builds on the functions of Layer 2 – line discipline, flow control, and error control. Layer 3 transmissions are connectionless, or best effort – they don’t do anything but send the traffic where it’s supposed to go. This is where we send information between and across networks through the use of routers. Instead of just node-to-node communication, we can now do network-to-network communication.