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Information you need or don't need about web 3 - 14
🔹 What is L1 (Layer 1)?
Definition:
Layer 1 is the blockchain itself – the base protocol layer. Examples:
$BTC
$ETH
$SOL
On this layer:
Transactions are executed directly on the main chain.
Security, consensus, and data integrity are provided directly by the chain.
Advantages:
High decentralization and security
Usually more battle-tested and robust infrastructure
Disadvantages:
Network congestion can occur
Transaction fees may rise (e.g., Ethereum gas fees)
Limited transaction speed (e.g., Bitcoin around 7 TPS)
---
🔸 What is L2 (Layer 2)?
Definition:
Layer 2 is a layer built on top of Layer 1. Purpose:
Reduce the load on L1
Make transactions cheaper and faster
How it works:
L2s aggregate and process transactions off-chain, then write the results back to L1, inheriting its security. Examples:
@arbitrum (Ethereum L2)
@Optimism
@zksync
@Starknet
@0xPolygon (some rollup solutions)
Technical approaches:
Rollups (Optimistic Rollup, ZK Rollup)
State Channels (e.g., Lightning Network for Bitcoin)
Plasma, Validium, and other alternatives
Advantages:
Low transaction fees
Faster confirmation times
Inherits security from L1 blockchains like Ethereum
Disadvantages:
More complex architecture
Wallet/user experience not always as smooth as L1
---
📌 In summary
L1 = the blockchain itself, where everything happens
L2 = scales L1, enabling faster and cheaper transactions while relying on its security
🔹 What is L1 (Layer 1)?
Definition:
Layer 1 is the blockchain itself – the base protocol layer. Examples:
$BTC
$ETH
$SOL
On this layer:
Transactions are executed directly on the main chain.
Security, consensus, and data integrity are provided directly by the chain.
Advantages:
High decentralization and security
Usually more battle-tested and robust infrastructure
Disadvantages:
Network congestion can occur
Transaction fees may rise (e.g., Ethereum gas fees)
Limited transaction speed (e.g., Bitcoin around 7 TPS)
---
🔸 What is L2 (Layer 2)?
Definition:
Layer 2 is a layer built on top of Layer 1. Purpose:
Reduce the load on L1
Make transactions cheaper and faster
How it works:
L2s aggregate and process transactions off-chain, then write the results back to L1, inheriting its security. Examples:
@arbitrum (Ethereum L2)
@Optimism
@zksync
@Starknet
@0xPolygon (some rollup solutions)
Technical approaches:
Rollups (Optimistic Rollup, ZK Rollup)
State Channels (e.g., Lightning Network for Bitcoin)
Plasma, Validium, and other alternatives
Advantages:
Low transaction fees
Faster confirmation times
Inherits security from L1 blockchains like Ethereum
Disadvantages:
More complex architecture
Wallet/user experience not always as smooth as L1
---
📌 In summary
L1 = the blockchain itself, where everything happens
L2 = scales L1, enabling faster and cheaper transactions while relying on its security
Information you need or don't need about web 3 - 15
💥 The Biggest Losses in Crypto History Several major events have caused massive financial damage, shaken investor confidence, and reshaped the crypto landscape. Here are some of the most notable ones: 🔥 1. Mt. Gox Hack (2014) Loss: ~850,000 BTC (worth billions of dollars today) What happened? At the time, Mt. Gox was the largest Bitcoin exchange. It was hacked and eventually went bankrupt. Impact: A huge blow to trust in Bitcoin. Prices plummeted. 🔥 2. Terra / LUNA Collapse (2022) Loss: Be...
Information you need or don't need about web 3 - 1
BTC vs ETH Inflation Bitcoin (BTC) Maximum supply: 21 million BTC Current supply increase: Bitcoin block rewards (new BTC issuance) halve approximately every 4 years (“halving”) Annual supply increase as of 2025: Around 1.7% Inflation trend: Decreasing over time because block rewards diminish. By around 2140, all BTC will be mined, and inflation will approach 0% Ethereum (ETH) Maximum supply: Unlimited (theoretically no upper limit) Supply increase: With Ethereum 2.0 and EIP-1559, a “burn mec...
Information you need or don't need about web 3 - 11
90% of “Flash Loan” attacks are not hacks in the technical sense, but rather actions carried out within the rules of the smart contract system itself. --- 📌 What does this mean? A flash loan allows users to borrow funds without collateral as long as the loan is borrowed and repaid within the same transaction block. The system prevents funds from being withdrawn before the transaction is completed. However, malicious actors can exploit this mechanism by manipulating price feeds or market dyna...
Information you need or don't need about web 3 - 15
💥 The Biggest Losses in Crypto History Several major events have caused massive financial damage, shaken investor confidence, and reshaped the crypto landscape. Here are some of the most notable ones: 🔥 1. Mt. Gox Hack (2014) Loss: ~850,000 BTC (worth billions of dollars today) What happened? At the time, Mt. Gox was the largest Bitcoin exchange. It was hacked and eventually went bankrupt. Impact: A huge blow to trust in Bitcoin. Prices plummeted. 🔥 2. Terra / LUNA Collapse (2022) Loss: Be...
Information you need or don't need about web 3 - 1
BTC vs ETH Inflation Bitcoin (BTC) Maximum supply: 21 million BTC Current supply increase: Bitcoin block rewards (new BTC issuance) halve approximately every 4 years (“halving”) Annual supply increase as of 2025: Around 1.7% Inflation trend: Decreasing over time because block rewards diminish. By around 2140, all BTC will be mined, and inflation will approach 0% Ethereum (ETH) Maximum supply: Unlimited (theoretically no upper limit) Supply increase: With Ethereum 2.0 and EIP-1559, a “burn mec...
Information you need or don't need about web 3 - 11
90% of “Flash Loan” attacks are not hacks in the technical sense, but rather actions carried out within the rules of the smart contract system itself. --- 📌 What does this mean? A flash loan allows users to borrow funds without collateral as long as the loan is borrowed and repaid within the same transaction block. The system prevents funds from being withdrawn before the transaction is completed. However, malicious actors can exploit this mechanism by manipulating price feeds or market dyna...
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Information you need or don't need about web 3 - 14 Quick read for web 3 @paragraph