Is Layer 2 the future of Bitcoin Scalability or a Detour from Decentralization?

[BitJannik]

The rapid rise of Bitcoin Layer 2 solutions like the Lightning Network.

Are these developments staying true to Bitcoins's ethos or are they creating unnecessary centralization risks?

[Oshosondy]

There are other ones like the LBTC.

Also there are others that are altcoins pegged with bitcoin price.

There is lightning network.


But I still noticed that people are always complaining about the bitcoin scalability. No matter what is crested, people will not change to complain.

Are these developments staying true to Bitcoins's ethos or are they creating unnecessary centralization risks?

Even the lightning network which is regarded as bitcoin is centralized. Liquid network has centralized federations. Those altcoins pegged with bitcoin price are all centralized. I think the bitcoin that should be stored on these layer 2 should be small. I see them to be centralized but not risky.

[Plaguedeath]

There's an interesting project namely Bitcoinlayers, if you check the trust assumptions, they're mostly centralized except Lightning network.

I think if we're not even sure and know with the layer 2 project, we should hold our Bitcoin on layer 1 for long term. Just use Bitcoin on layer 2 if you want to trade for something or taking advantage over the cheaper fees.

L2.watch is a website displaying the status of most of the known projects. There is also this overview about sidechains and related projects like Spacechains and Spiderchains. BitcoinLayers is doing risk analysis for some of the existing projects.

[zeuner]

The obvious way to avoid centralization is to actually become involved. If whatever layer 2 effort is prohibitively hard and/or expensive to _technically_ become a part of it, chances are that only few will, leading to centralization.

Which also means that a good (read: decentralization-focused) layer 2 effort would be interested in getting people technically involved, rather than just convince them to buy themselves in, e.g. by writing documentation etc.