Understanding Layer 2 Scaling Solutions and Zero-Knowledge Technology

Even with the Ethereum merge on the horizon, scalability is still a topic of discussion amongst crypto enthusiasts. While ETH 2.0 aims to change the infrastructure of the Ethereum network itself, L2 solutions and Zero Knowledge technology are additional methods for achieving scalability. This article will look into both solutions and how they work.

Quick Overview on Layer 2 (L2) Scaling Solutions

In order to improve Ethereum's maximum throughput (the rate at which transactions are processed) and reduce the transaction fees that end users must pay, L2 scalability solutions add new protocols to an existing blockchain. They employ the basic protocol as a foundation for additional layers of decentralized security, in contrast to L1 solutions (like Ethereum 2.0) that aim to modify the Ethereum consensus process or other key principles. 

They do not modify the protocol itself but rather build upon it. This goal is met by L2 solutions, which use the blockchain for security and offload Ethereum by moving computations off the main chain. Due to the off-chain nature of these activities, the quantity of data needed to be kept on the root chain is drastically decreased, potentially lowering transaction costs and increasing transaction speeds.

Zero Knowledge / ZK-Technology

The cryptographic area known as zero-knowledge technology assists blockchain projects in overcoming the scalability and privacy constraints inherent in many layer-1 blockchains. 

Due to the technology, blockchain projects may enable more complex processing, protect user data while still authenticating identities, and allow for higher transaction throughput. Furthermore, it provides the path for businesses to employ blockchain technology without jeopardizing their intellectual property rights. Each application scenario is built on proofs that do not need any previous knowledge.

What exactly is meant by "zero-knowledge proofs" (ZKP), and how do these proofs work? First, users can signal that they are familiar with a piece of data without disclosing the information to which the data refers by using ZKPs. 

Although the "verifier" does not have access to the data used to create the proof, they are responsible for confirming that it was computed properly. Someone who makes proof utilizing their knowledge of a system's inputs is known as a "prover." Zero-knowledge proofs let you check if a set of data is correct without giving away any information about the data. This process works by using a secret key. This is made possible since it is not necessary to reveal whether or not the dataset in the issue is valid.

Zero-knowledge solutions allow developers to scale their dapps (via faster transactions and lower costs) while inheriting the security of the main blockchain (i.e., Ethereum). With these features, teams may develop dApps that are as feature and performance-rich as traditional platforms while maintaining the benefits of decentralization.

Conclusion

Layer 2 scaling solutions and Zero Knowledge technology provide highly efficient methods of scaling Layer 1 networks. Taking transactions off the main network can reduce costs while speeds are improved.