What Are the Key Differences Between Layer 1 and Layer 2 Protocols in Blockchain

[welshhana]

How do Layer 1 protocols like Ethereum and Bitcoin differ from Layer 2 solutions such as the Lightning Network or Optimistic Rollups? What are the unique challenges and advantages of each, and how do they impact scalability, security, and user experience in the blockchain ecosystem?

[Yamane_Keto]

Layer-2 is a chain that derives from layer-1. There is no layer-2 without layer-1. This can be expressed by saying that it is locking coins in a multisignature smart contract, which means that the tokens formed in layer-2 are 1:1 to the tokens of layer-1, but these tokens have higher scalability and more efficient management of smart contracts.
When comparing you are comparing Layer 2 to sidechains not Layer 1.

[ABCbits]

These days word "layer 2" refer to so many things, such as sidechain (e.g. Rootstock), payment channel (e.g. Lightning Network) or even fake layer 2[1]. But generally the difference is,
1. Layer 2 depends on layer 1. If layer 1 stopped operating (e.g. doesn't create new block), it would halt the layer 2 as well.
2. Layer 2 usually have lower TX fee and faster confirmation, usually at expense of centralization (e.g. Liquid) or technical complexity (e.g. Lightning Network).

[1] https://blockspace.media/insight/most-bitcoin-layer-2s-are-marketing-scams/

[Ambatman]

How do Layer 1 protocols like Ethereum and Bitcoin differ from Layer 2 solutions such as the Lightning Network or Optimistic Rollups? What are the unique challenges and advantages of each, and how do they impact scalability, security, and user experience in the blockchain ecosystem?

specifically mentioning scalabilty, security and user experience shows you have an idea
So I see no reason why such question was asked.
Layer 1 as you might have known or has been answered already are more secured compared to Layer 2 not just because Layer 2 is reliant on L1 but because they introduce new risk like
Unlike L1 that can be stored in a cold wallet, Layer 2 can only be stored in Hot wallets.
L2 also requires continuous monitoring during transaction to prevent fraudulent acts.
L2 are inherently more decentralized and less Complex but trade this off for Poor scalabilty.
This is where and why L2 were created.

P. S L1 here is Bitcoin and L2 is Lightning network, not quite conversant with the Ethereum Blockchain.

[bitmover]

How do Layer 1 protocols like Ethereum and Bitcoin differ from Layer 2 solutions such as the Lightning Network or Optimistic Rollups? What are the unique challenges and advantages of each, and how do they impact scalability, security, and user experience in the blockchain ecosystem?

Here is a list of many Bitcoin L2 projects. According to this website, there are 77 active layer 2 on bitcoin network.
https://btcl2.info/

Some bitcoin most know layer 2 solutions:

Lightning network
Liquid network (https://liquid.network/)

[HeRetiK]

Layer-2 is a chain that derives from layer-1. There is no layer-2 without layer-1.

1. Layer 2 depends on layer 1. If layer 1 stopped operating (e.g. doesn't create new block), it would halt the layer 2 as well.

Conversely it is also worth noting that while L2 is dependent on L1, L1 is not affected by anything that is happening on L2.

This is one of the main reasons for L2 in the first place: To be able to add new features (which may be related to scalability, privacy, smart contracts or whatever else) without having to make potentially breaking changes to the base layer.

[Reatim]

How do Layer 1 protocols like Ethereum and Bitcoin differ from Layer 2 solutions such as the Lightning Network or Optimistic Rollups?

Layer 1 is basically the base layer of these blockchains where transactions are directly executed. Layer 1 is the primary and fundamental layer of a blockchain. Wherein Layer 2 is built on top of Layer 1. Layer 2 are built to enhance and solve some of the problems of Layer 1.

What are the unique challenges and advantages of each, and how do they impact scalability, security, and user experience in the blockchain ecosystem?

Layer 1 is generally more secure than Layer 2. This is because in L1, there is a bigger network size that allows for more decentralization compared to L2. L2 functions with a smaller network size. Another reason why L1 is more reliable is because this is where transactions are directly recorded which allows for maximum transparency compared to L2 that makes transactions off-chain. However, L2 allows for more scalability that the L1 can’t handle. L2 allows for faster and cheaper transactions. Not by a much, though. Since developers are thinking of adding even more layers.