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Scratching the surface of L2s blockchains
Hey there! Diving deep into the intricate world of blockchain and L2 solutions on the latest episode of the Web Visions podcast. You can watch the full video on our channel on Youtube here:
The demand for L2 networks
At Visible Magic, we have experience with the blockchain arena for nearly eight years. As we wrapped up 2023, a year of dramatic shifts in crypto and Web3 narratives, our conversation naturally veered towards Layer 2 (L2) solutions, a hot topic in the blockchain community.
L2s, essentially networks built on top of primary blockchains like Ethereum, are designed to enhance transaction speeds and reduce costs. However it became clear that the reality of L2s is more complex and nuanced than the hype suggests.
One key point is the specialization of L2s. Each seems to cater to specific demographics, like DeFi or NFT art collecting, creating a sort of digital mall with each "store" focusing on a particular vertical. This specialization raises questions about the true decentralization and resilience of these networks.
Moreover, the economics of L2s are quite obscure. They promise cheaper transactions, but this often just pushes fees down the line. The real cost might be hidden in the network's structure or subsidized by big players like Coinbase with their L2, Base.
A critical concern is the sustainability and risk associated with L2s. The hype and marketing around these solutions often mask the underlying vulnerabilities. I am particularly skeptical about the long-term viability of these networks. Because of added complexity and potential fragility they introduce to the blockchain ecosystem.
The shift from PoW (proof of work) to PoS (proof of stake) in networks like Ethereum hasn't solved the high fee issue, and the proliferation of L2s might be more about speculative investment than solving real-world problems.
Vision for 2024
Looking ahead to 2024, it's clear that L2s will continue to be a significant topic of discussion and debate. Please be reminded of the importance of critical thinking and due diligence when you select a network for your next application.Remember, every L2 dreams to become an L1 at some point. But the path to achieving that dream is fraught with challenges and uncertainties. Stay tuned for more insights and discussions as we continue to explore this fascinating landscape.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit visiblemagic.substack.com
View all episodes
By Visible MagicHey there! Diving deep into the intricate world of blockchain and L2 solutions on the latest episode of the Web Visions podcast. You can watch the full video on our channel on Youtube here:
The demand for L2 networks
At Visible Magic, we have experience with the blockchain arena for nearly eight years. As we wrapped up 2023, a year of dramatic shifts in crypto and Web3 narratives, our conversation naturally veered towards Layer 2 (L2) solutions, a hot topic in the blockchain community.
L2s, essentially networks built on top of primary blockchains like Ethereum, are designed to enhance transaction speeds and reduce costs. However it became clear that the reality of L2s is more complex and nuanced than the hype suggests.
One key point is the specialization of L2s. Each seems to cater to specific demographics, like DeFi or NFT art collecting, creating a sort of digital mall with each "store" focusing on a particular vertical. This specialization raises questions about the true decentralization and resilience of these networks.
Moreover, the economics of L2s are quite obscure. They promise cheaper transactions, but this often just pushes fees down the line. The real cost might be hidden in the network's structure or subsidized by big players like Coinbase with their L2, Base.
A critical concern is the sustainability and risk associated with L2s. The hype and marketing around these solutions often mask the underlying vulnerabilities. I am particularly skeptical about the long-term viability of these networks. Because of added complexity and potential fragility they introduce to the blockchain ecosystem.
The shift from PoW (proof of work) to PoS (proof of stake) in networks like Ethereum hasn't solved the high fee issue, and the proliferation of L2s might be more about speculative investment than solving real-world problems.
Vision for 2024
Looking ahead to 2024, it's clear that L2s will continue to be a significant topic of discussion and debate. Please be reminded of the importance of critical thinking and due diligence when you select a network for your next application.Remember, every L2 dreams to become an L1 at some point. But the path to achieving that dream is fraught with challenges and uncertainties. Stay tuned for more insights and discussions as we continue to explore this fascinating landscape.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit visiblemagic.substack.com