Introduction to Layer2 – A new dynamic for crypto exchange operations?

Blockchain is a scalable technology that can provide modern, technological solutions for a whole lot of issues – and it is ever developing. The increasing interest in crypto exchange and digital assets overall led to a surge in blockchain activities. While this is a positive development, it also has its downsides. For example, when the blockchain is crowded, sometimes transactions take more time to settle.

We at Bintense make it a habit to regularly inform users on relevant blockchain topics, since we are a client-centric crypto exchange. That’s why we want to talk about Layer2 today, and to explain the concept in simple terms. Although it sounds complicated at first, we hope to make it more easy to comprehend.

Layer2 for beginners

Think of Layer2 in crypto like a super express lane for transactions. Imagine the main road is the blockchain, where everyone’s transactions are checked and added. But sometimes, when lots of people are driving, it gets congested.

Layer2 is like a special shortcut that helps ease the traffic. It takes some transactions away from the main road and processes them quickly and without clogging up the main blockchain. This way, transactions are once again faster and with lower fees. This makes the whole crypto journey smoother and more efficient for everyone involved.

Layer2 on the Ethereum blockchain

Layer2 within the context of the Ethereum blockchain, which is a crypto coin that is available via the Bintense crypto exchange, is an efficiency enhancement mechanism in this context. Consider the Ethereum network as a main thoroughfare for various activities. The network fosters tens of thousands of crypto projects. Naturally, the scope of activity has increased exponentially over the last several years.

To avoid delays in transactions (which can affect Ethereum prices), Layer2 introduces an auxiliary avenue that alleviates this congestion by diverting certain tasks away from the primary network. All transactions are just as secure as they would be on the blockchain itself, and they are verified via it, so there’s no need to worry about breaches and hacks.

Added value to crypto exchange?

We believe that when using a crypto exchange online, the overall experience should be secure and also fast. We at Bintense have optimized our infrastructure and continue to do so regularly, while keeping it user-friendly.

As demand for cryptocurrencies increases, blockchain needs to handle larger flows, which is where Layer2 can provide the highest value. By shifting some tasks off-chain, and using the main network for the most important ones, Layer2s help the industry mature, adjusting to the growing activity.

This improved performance encourages broader adoption as users can interact with the blockchain swiftly and economically. Moreover, Layer2 solutions can support a wide range of use cases, from decentralized applications to complex smart contracts, without compromising the security and decentralization features of the underlying blockchain.