Part 2/12:
The conversation began with the fundamental question: why do we need Layer 2 solutions? At its heart, the challenge lies in Bitcoin's very design—its commitment to decentralization and security comes at the cost of limited scalability. Bitcoin is crafted as a minimalistic blockchain to maximize security and resistance to censorship, which inherently restricts transaction throughput and size.
Layer 2 solutions aim to expand Bitcoin's utility by allowing more transactions, faster movement, or even smart contract execution without compromising the security or decentralization of the base chain. The core idea is to build these extensions above the main chain, utilizing trade-offs that favor either scalability, privacy, or programmability depending on the technology.