The growth of Ethereum has given many reasons for businesses to build a network on it and invest in it. The global statistics of business blockchains are also rapidly increasing. Ethereum Layer 2 blockchain solutions are helping businesses to solve many issues they have been facing with other systems and networks.
Ethereum L2 solutions are specifically built to offer scalability, providing more benefits than Ethereum in many aspects. They have the potential to solve issues associated with latency and speed. Some L2 networks also provide instant confirmations of the transactions and there will be an economic guarantee to include the transaction in the succeeding L2 block.
Ethereum is an open-source, flexible, low-cost blockchain that facilitates smooth cooperation between various parties. Ethereum also serves as a distributed ledger in coordinating various data. There are unique layers in the architecture of Ethereum that strengthens and provides new opportunities for different business systems. Below are some of the current strengths of Ethereum.
- Data Coordination
The decentralized architecture of Ethereum provides more trust and information, which avoids the need for a central authority for the participants in a network to carry out transactions and handle the system.
- Fast Deployments
Hyperledger Besu is a one-for-all SaaS platform that helps enterprises with easy deployments and management of private blockchain systems rather than trying to code a new blockchain implementation.
- Network Size
An Ethereum network has the potential to work with numerous users and nodes. Currently, almost every enterprise blockchain is operating on networks that work with nodes less than 10. They also do not have any reference cases regarding a viable and vast network. The size of a network is important for enterprise pools that may outgrow the limited number of nodes.
- Permissioned Networks
The open-source protocol layer of Ethereum helps businesses to create private or public Ethereum networks so that the business solution suits all the security and potential regulatory requirements.
- Private Transactions
Ethereum provides privacy for enterprises by creating private pools using private transaction layers. It will make sure that the private information of the enterprises is not broadcasted to the network participants. Such private information will be encrypted and shared with private parties only.
- Performance And Scalability
Gas limit, custom block time, and Proof of Authority consensus ensures that consortium networks using Ethereum blockchain have the power to outperform the current systems and execute hundreds of transactions within seconds. This number may increase depending on the network configuration. Various protocol-level blockchain solutions like off-chain and sharding, as well as Layer 2 scaling systems like state channels and Plasma, give Ethereum more opportunities to maximize its throughput in the coming years.
- Incentive Layer
The crypto-economic layers of Ethereum help business networks build mechanisms that can easily find fraud activities and punish them. Also, activities like availability and verifications can be rewarded by creating them. It will help businesses to ensure their safety by denying any nefarious activities around the systems. Business security will be crucial in the coming years.