Most bitcoin L2 networks may not be viable in the long term, despite their popularity as a promising method of saving cheap, fast and decentralized payments. This is the conclusion reached by Galaxy Research.
there are dozens of rollups being “built on bitcoin”
but only a small few will launch & survive on bitcoin
bitcoin doesn’t have enough blockspace for all of them, and the cost to post data will be much too expensive for most of them@hiroto_btc explains why in a new report pic.twitter.com/dKnDRDgjAO
Experts have highlighted the cost of hosting data at the basic level as the main problem faced by the roll-ups of the first cryptocurrency network. Using the base level is necessary so that a regular node can restore the last state of L2 at any time.
The amount of block memory in the bitcoin blockchain is limited to 4 MB, and placing data in it requires significant use of space. Each such transaction can "weigh" up to 400 KB (0.4 MB), actually occupying 10% of the total available volume.
Experts noted that in the context of the publication of numerous rolls of their data every six to eight blocks, the basic commissions can increase significantly, which can lead to the displacement of small transfers.
In order to "survive", L2 must surpass each other in generating fees, as this will determine their priority in blocks, experts stressed.
According to Galaxy Research, in a low-fee environment where regular transactions cost ten sat/VB, rollups will spend $460,000 monthly to maintain security. In environments with high fees of 50 sat/VB, the figure will increase to $2.3 million.
Alexey Zamyatin, co-founder of the Build on Bitcoin (BOB) project, said that bitcoin rollups can be as cost-effective as their Ethereum counterparts. He opposes the use of the mainnet of the first cryptocurrency to ensure data availability.
As an alternative, the expert recommends using Celestia or the Bitcoin sidechain with combined mining. The latter option sacrifices some of the benefits of full decentralization and the security of the digital gold network.
Report on L1 data costs on Bitcoin from the perspective of L2s.
My 2 cents (imho this is missing in the report).
- No-one will post data on the L1. Use @CelestiaOrg or Bitcoin-native solutions like @babylonlabs_io @nubit_org , or a merge-mined DA sidechain.
- Bitcoin L2s will… https://t.co/IU8pZ9us4s
"No one will use L2 on Bitcoin if they are 100 times more expensive than L2 on Ethereum just because "they are on digital gold." The good news is that they will not be more expensive," the expert concluded.
Recall that ForkLog talked about a proposal related to scaling the blockchain of the first cryptocurrency to improve bitcoin called OP_CAT (BIP-347).
https://forklog.com/cryptorium/chto-takoe-l2-resheniya-masshtabirovaniya-dlya-bitkoina