Rollup Solutions and Operational Mechanism of Bitcoin Layer 2

Rollup Solutions

The Layer 2 network of Bitcoin (BTC) has garnered significant attention and a growing community of developers. Drawing inspiration from the development of Ethereum's Layer 2 (L2) network provides valuable insights.

Ethereum Layer 2 (L2) solutions are engineered to enhance the scalability of the Ethereum network by processing transactions off the primary Ethereum blockchain (Layer 1) and then settling the final state on Layer 1. This innovative approach results in a substantial increase in transaction throughput and a reduction in associated costs.

Within the realm of Layer 2 scaling solutions, two standout technologies, Optimistic Rollups (OP) and Zero-Knowledge Rollups (ZK Rollups), offer distinct mechanisms and advantages.

Operational Mechanism of Bitcoin Layer2

The Bitcoin network lacks a complete Turing machine execution environment, which means it cannot automatically verify state updates through smart contracts like the Ethereum (ETH) network. As a result, Bitcoin cannot seamlessly transition to a new on-chain state without relying on offline verification nodes to validate the updates and ensure their accuracy.

Even with zk-proofs uploaded to the Data Availability (DA) layer, verification still depends on offline nodes rather than automatic triggers through on-chain smart contracts. This means that zk technology cannot provide instant finality within the Bitcoin network.

On the other hand, Optimistic (OP) technology operates under the assumption that all transaction records are reliable. It uses a multi-round interaction verification approach to identify any erroneous transactions and penalize nodes that update the state incorrectly. Consequently, OP technology is better suited for expanding the Bitcoin Layer 2 network.