The Ethereum network can only process about 15-45 transactions per second which is significantly limited when compared to Visa, which can process up to 24,000 transactions per second, and even Bitcoin, which has implemented several scaling solutions aiming to speed up transactions. To address the growing scalibility issues, Ethereum has evolved from PoW (proof of work) to PoS (proof of stake).
However, the transition to PoS is still ongoing and will take time to develop fully. Therefore, the Ethereum community is exploring a variety of solutions to scale the network. One solution is Layer 2 scaling solutions. Layer 2 scaling solutions are built on top of the Ethereum network, but allow transactions to be processed off-chain, reducing congestion and increasing throughput.
There are several Layer 2 scaling solutions being developed, notable among them are State Channels, Plasma, Rollups and Optimistic rollups. State channels are off-chain scaling solutions that allow for private and fast transactions. Plasma is another off-chain solution that allows developers to create sub-blockchains, which can communicate with the main Ethereum blockchain.
Rollups are a Layer 2 scaling solution that aggregate multiple transactions into a single transaction on the Ethereum blockchain. Optimistic rollups are similar to Rollups but use an optimistic approach to process transactions instead of relying on a centralized operator.
These new Layer 2 scaling solutions will offer significant improvements to the Ethereum network. They will provide faster throughput, low fees, and improved security. These solutions offer a way for non-technical users to interact with Ethereum network regardless of the increasing congestion on the main chain.
Furthermore, these scaling solutions also provide a great opportunity for developers to create and deploy scalable decentralized applications, as they enable developers to build applications that consume less gas, has lower fees and enable better user experiences, are secured and transparent.
In conclusion, Layer 2 scaling solutions will revolutionize the Ethereum network by addressing and solving its scalability problem. It will bring decentralized finance (DeFi), gaming, and other decentralized applications to a wider audience, making it more accessible, secure and scalable. The future of Ethereum is indeed promising with the use of Layer 2 scaling solutions.