to 24000 TPS in case of need. Hence, if cryptocurrencies are to be

considered as a mainstream payment solution, they must be able to

handle scalability and performance issues to be at par.

1.12.3 Transaction Fees

The fees for a transaction in the Bitcoin network keeps fluctuating as

the price of the associated crypto changes. This is a major concern

for a business as they would have no idea about how much it would

be at the time of the business transactions. In many next-generation

public Blockchains, this part has been stabilized by improving the

consensus model.

1.12.4 Layer-2 Solutions

In the public Blockchain networks, often we have two layers, i.e.,

Layer-I (L1) and Layer-II (L2). While L1 is the consensus of the basic

or the main Blockchain layer, L2 refers to any additional network that

supports the L1 in order to scale. For example, Bitcoin is currently

using the Lightning network that works on top of the Bitcoin network

to enable the private transactions between parties. Similarly, many

new L2 solutions are being used in the next-generation public

Blockchain networks nowadays, in order to meet the requirements of

scalability.

The second layer scaling solution can be implemented using many

different options; the following is a list that represents the most

popular ones:

Sharding

State Channels

Parachains

Sidechains

Rollups

Let’s explore them one by one.

1.12.4.1 Sharding