LD Capital Vitalik defined Layer2 and also outlined the future roadmap for Bitcoin.

Vitalik Defines Layer2 and Outlines Future Roadmap for Bitcoin at LD Capital Event

Translation from Twitter user @BobBodily

Original link: https://twitter.com/BobBodily/status/1719552010536759589

Translation:

Vitalik Paints a Future Roadmap for Bitcoin

Vitalik has just released a new blog post on different types of Layer 2 (L2) on Ethereum, and I think this is closely related to Bitcoin.

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Here’s my explanation:

Heterogeneity of L2 (L2 Becoming Increasingly Distinct)

Vitalik believes that we are gradually seeing the L2 on Ethereum becoming more heterogeneous, meaning that there won’t be a single type of L2 anymore, but rather a variety of L2 with different trade-offs.

Explaining the trade-offs mentioned here using the blockchain trilemma (a term coined by Vitalik himself) is most appropriate, which points out the trade-offs between the three essential aspects of blockchain technology: security, scalability, and decentralization.

Some L2 have the following characteristics:

1. Slower, higher cost, more secure.

2. Faster, lower cost, but with more trust assumptions.

3. In the middle ground in terms of speed, cost, and security.

Examples

In some cases, these L2 become Layer 1 (L1) of the Layer 2 (L2) (e.g., Polygon as an Ethereum sidechain, gradually transitioning to Polygon 2.0, becoming Ethereum’s L2 Rollup).

In some cases, they aim to achieve a fully decentralized system by decentralizing certain parts of their technology stack.

In other cases, they aim for decentralization but may not necessarily require high levels of security for gaming/social media platforms.

In each case, you need to make different trade-offs in the blockchain trilemma, meaning you need different solutions (or L2) to accomplish different tasks.

3 Types of L2 (Actually more like gradients)

In his post, Vitalik talks about three main types of Layer 2 (L2):

1. Rollup

2. Validium

3. Disconnected systems

Rollup

Rollup is a zero-knowledge Rollup where you can always bring assets back to L1 without needing trust.

Computation is verified through fraud-proof or validity proofs, and the entire data is stored on L1. Currently, there aren’t zk Rollups for Bitcoin because Bitcoin cannot verify validity proofs, but there are many projects on Ethereum working towards this goal.

These are usually more expensive because they require full data availability on L1 and costly large proofs.

Validium

Validium is an evolution of Rollup. In Validium, data is stored off-chain and only the proofs are stored on L1. This means that Validium costs much less than Rollup, but introduces additional trust assumptions regarding off-chain data storage.

In the case of Validium, if off-chain data is lost, your assets may also be lost (not stolen).

In the Validium model, the main cost is the cost of proofs, although data storage costs are reduced.

Disconnected

A Disconnected Layer 2 is essentially a sidechain, where you have a completely independent blockchain or server. You trust in multi-signature or a group of people to safeguard your tokens, and then you can enjoy the benefits of a sidechain (faster transaction speed, lower fees, etc.).

Layer 2 is a category

Importantly, Vitalik points out that L2 is a continuum, not a discrete classification. This means that an L2 can fall between Validium and Rollup, or between Disconnected L2 and Validium.

Another important aspect of L2 is its “connectivity” with L1. Vitalik breaks it down into two parts:

1. Security extracted from Ethereum

2. Security reading Ethereum

These properties also distribute within a continuous range.

Lastly, he discusses the security spectrum, from the security requirements on the left side of the graph to the scalability requirements on the right side.

So what does all this have to do with Bitcoin?

This is closely related to Bitcoin.

In Bitcoin, we have:

Ordinals, BRC-20, CounterLianGuairty, Stamps, SRC-20, Colored coins, ARC-20, Atomicals, TAP, PIPE, BRC-100, BRC-69, BRC-21, ORC-20, ORC-CASH, Runes, Runestone, BRC-721, Lightning Network, Taproot Assets, RGB, Omni, MVC, Libre, Chia, Babylon, Interlay, Liquid, Stacks, ICP, RSK, ETH, BitVM, Bitcoin Script, TapScript, DLCs, Drivechains, Sidechains, SLianGuaicechains, Spiderchains, Statechains, Softchains, Ark, Optimistic Rollups (similar), Sovereign rollups (emerging), ZK-Rollups (prospective), and more.

Bitcoin has multiple interesting layers that can be categorized using Vitalik’s simple L2 framework. They span from Rollup L2 to Validium L2 to Disconnected L2. You can extract security from L1 and read security from L1, depending on whether you prioritize security or scalability.

All of these Bitcoin layers involve trade-offs (explained well by the blockchain trilemma), and this also explains why we might see many more layers being built on top of Bitcoin.

Summary

Vitalik has just outlined the future roadmap for Bitcoin, and the future roadmap is a wonderful world full of interesting Layer 2 solutions, each making different trade-offs to support different use cases and collectively increasing the decentralization of the Bitcoin Layer 2 ecosystem.

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