Which is better, Layer 1 or Layer 2 blockchain networks?

Which is better, Layer 1 or Layer 2 blockchain networks?

A Layer-2 refers to any off-chain network, system, or technology built on top of a blockchain (commonly known as a layer-1 network) that helps extend the capabilities of the underlying base layer network.

The first Layer 1 blockchain network was Bitcoin. Layer 1 network requires each transaction to be validated by miners, which usually takes time and can be expensive. When the network usage increases, the blockchain fees follow this increase, and quite often, the time to process a transaction becomes longer. This is one of the major challenges that Layer 2 networks solve.

Layer 2 networks don't require all transactions to be validated via the main blockchain network. They simply bundle them and validate a few transactions at once. This decreases the usage of the Layer 1 network, which ultimately decreases the fees. Layer 2 networks can support any blockchain to introduce enhancements such as lower fees and almost instant transaction times.

Solving the scalability problem is the primary goal of Layer 2 blockchain networks such as Lightning network or Polygon (MATIC). Xapo Bank is the first regulated bank in the world to offer access to Lightning network payments as well as offering Polygon (MATIC) tokens for buying and selling.

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