Layer 2
Layer 2 is an additional layer on top of a blockchain that settles transactions quickly and cheaply and only secures the result on the base layer.
Explained simply
Because layer 1 is slow and expensive, layer-2 networks bundle many transactions outside the base layer and write back only a summary. That cuts the cost per transaction drastically.
Security still comes from layer 1: anyone trying to cheat would be caught when the summary is written back. On Ethereum these networks are called "rollups"; for Bitcoin the Lightning Network is the best-known example.
From the familiar world
The bar tab: instead of paying for each drink by card, the waiter runs a tab and there is one bill at the end. Layer 2 is the tab, layer 1 the card payment at the end.
An example
On major Ethereum rollups a transfer often costs fractions of a cent and is confirmed in seconds, while the same transaction on Ethereum itself can cost several euros.
Why it matters
Layer 2 is the answer to the common objection "blockchains are too slow and expensive for everyday use". Payment providers and banks build their blockchain offerings mostly on such layers.
To pass on
„Layer 2 is the bar tab: bundle many small bookings and only record the result for good.“
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