Part 6/12:
By 2015, the Lightning Network was formally proposed, offering an off-chain payment channel system that could handle many transactions privately between users.
The evolution of layer solutions saw two prominent camps emerge:
Big blocks—raising the block size to accommodate more transactions directly on-chain.
Second-layer solutions—like Lightning and sidechains—offering scalability without sacrificing decentralization.
Side Chains and Pegs: Flexibility with Risks
Side chains, such as Liquid or RSK, are separate blockchains that peg to Bitcoin via mechanisms like multi-signature federations or proof-of-work.
Key points include:
They allow:
faster transactions,
privacy enhancements,
smart contract experimentation.