By
Deyan Dimitrov, Grace
30 Minutes to Read
Bitcoin Layer 2 (L2) solutions are a critical part of scaling and enhancing the functionality of Bitcoin without compromising the security and decentralization of the base layer.
These solutions aim to increase transaction throughput, reduce fees, and enable new functionalities such as smart contracts and tokenization.
This research explores the L2 ecosystem, focusing on established and emerging technologies, including the UTXO model, data storage on Bitcoin, inscriptions, and various Bitcoin sidechains and rollups.