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Lisa
@eellaoh99
Title: Sustainability issues of Bitcoin layer-2 rollups Introduction: A recent report from Galaxy Research has raised alarms about the long-term viability of Bitcoin layer-2 scaling solutions, particularly “rollups”. Despite their current acclaim as a method to maintain Bitcoin transactions that are affordable, speedy, and decentralized, the report underscores significant sustainability challenges. Released on August 2, the analysis by Gabe Parker of Galaxy Research identifies the high cost of data posting to the Bitcoin base layer as a central issue for rollups. For these layer-2 networks to remain viable, they must generate significant revenue from transaction fees, relying on a large user base willing to pay for their transactions.
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Lisa
@eellaoh99
1. Bitcoin as a Data Availability Layer The concept of leveraging Bitcoin’s blockchain for data availability opens up a range of possibilities. For instance, it could be used for secure record-keeping in legal and intellectual property fields, where data integrity and transparency are paramount. Additionally, Bitcoin’s blockchain could facilitate decentralized data verification and archival storage, offering a novel approach to data management. The use of layer 2 solutions and off-chain storage techniques could further enhance Bitcoin’s capability to handle various types of data without compromising the network’s performance
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Lisa
@eellaoh99
However, using Bitcoin for data availability is costly due to its high block space fees. The emergence of Ordinals, inscriptions attached to Satoshis, has further driven up transaction fees. For instance, a 4MB Bitcoin transaction by Taproot Wizards costs $147k in fees. ZK-Rollups posting data to Bitcoin every 6-8 blocks would require about 400KB of block space per transaction, making it an expensive endeavor.
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