Opinion: Is Bitcoin Layer 2 cooling down?
TechFlow Selected TechFlow Selected
Opinion: Is Bitcoin Layer 2 cooling down?
It feels like the current state of Bitcoin Layer2 is: those already listed are underperforming, while those not yet listed have little to show for their development.
Navigating Web3 tides with focused insightsArticle by: Web3CN Editor
I've been following the Bitcoin Layer2 space since August 2023—over a year now. Like most people, my overall impression of the current Bitcoin Layer2 landscape is this: It's underwhelming—it feels like it’s about to die!
To avoid offending anyone, I won’t name names.
The current state of Bitcoin Layer2 seems to be: those already listed on exchanges are performing poorly; those not yet listed have little to show for their progress.
Is the Bitcoin Layer2 sector really dying?
I’ve constantly tried to identify the real root cause behind this:
Is it because their investor lineup isn’t impressive enough?
No. Many BTC Layer2 projects have backing from top-tier firms like MultiCoin and Polychain.
Are the teams incapable of creating momentum?
Definitely not. Many BTC Layer2 teams are actually known for being highly aggressive in marketing and outreach.
If neither funding nor team execution is the issue, there must be a deeper reason!
I’ve kept thinking about it.
Recently, I read BEVM’s new technical whitepaper titled *Super Bitcoin* (BEVM has long been known for technical innovation, though its ecosystem remains weak), and I believe I finally found the answer.
The whitepaper is fascinating—it revolves entirely around one phrase: sharing Bitcoin’s consensus security.
Its core claim: Any Bitcoin Layer2 that fails to share Bitcoin’s consensus security is doomed to fail!
Harsh? Yes.
But accurate.
The *Super Bitcoin* whitepaper also argues that Ethereum Layer2 works because Ethereum Layer2 solutions can inherit Ethereum’s consensus security. People use Ethereum Layer2 because they trust Ethereum’s network security.
However, nearly all Bitcoin Layer2s do NOT share Bitcoin’s consensus security. They’re essentially multi-sig wallets paired with an independent chain running separate consensus—completely disconnected from Bitcoin, with zero shared security.
Therefore, when a project calls itself a "Bitcoin Layer2" while operating as a completely unrelated chain, users have no basis for trust or confidence—and naturally, the market ignores them.
This idea intrigued me, so I dug deeper. Here are some findings I’d like to share.
First, let’s clarify a few key concepts.
What is consensus security? And what does “shared consensus security” mean?
What Is Consensus Security?
Consensus security refers to how nodes in a blockchain network use a consistent consensus algorithm to ensure transaction validity and security. For most blockchains, consensus security means that a majority of nodes must validate transactions through agreed mechanisms to resist external attacks or tampering.
In short, consensus security is the foundation of blockchain—the highest level of security, as it relies on all network nodes enforcing rules at the consensus layer.
Every independent public chain has its own consensus security mechanism—for example, Bitcoin uses PoW, Ethereum uses PoS, TRON uses DPoS, and Solana uses PoH.
However, the strength of a chain’s consensus security isn’t determined by the type of mechanism used, but rather by the cost required to compromise its network consensus.
For instance, to attack Bitcoin’s consensus, an actor would need control over 51% of the total hash rate. Currently, Bitcoin’s global hash rate is approximately 725 EH/s, meaning an attacker would require at least 370 EH/s (51%). At current market prices, acquiring that much hashing power costs over $15 billion—not including electricity, bringing the total well beyond $20 billion.
For PoS chains like Ethereum, we estimate consensus security based on the “total value of staked tokens” (i.e., attack cost). Currently, around 35 million ETH are staked across the network, worth roughly $90 billion. Thus, attacking Ethereum would cost approximately $46 billion.
Data shows that the cost to attack Bitcoin’s consensus is more than four times higher than that of Ethereum. Therefore, Bitcoin’s consensus security is far stronger.
Compare this to other PoS chains—say, those with FDVs under $1 billion and staking rates below 20%. Their total staked token value might be less than $200 million, making the attack cost just ~$110 million. Their consensus security is significantly weaker.
Using the straightforward “attack cost theory,” we can clearly assess the consensus security levels of any public chain.
By this metric, Bitcoin is undeniably the most secure blockchain!
Then, What Is Shared Consensus Security?
Shared consensus security means certain blockchains—mainly child chains or Layer2s—can leverage the mainchain’s consensus mechanism to ensure their own security. This allows transactions on Layer2s, sidechains, or parallel chains to still benefit from mainchain-level protection. Examples include:
1. Polkadot and Parachains:
In Polkadot’s architecture, the Relay Chain provides global security, while individual parachains inherit this security by sharing the mainchain’s consensus. Parachains can focus on specific functions without sacrificing security, as they rely on Polkadot’s core consensus. (That said, DOT’s current market cap is ~$6 billion, with ~58% staked—about $3.48 billion staked value—leading to an estimated attack cost of ~$1.77 billion. Given its relatively low consensus security, even sharing Polkadot’s consensus offers limited value, which partly explains why the Polkadot ecosystem remains stagnant.)
2. Ethereum and Ethereum Layer2:
Ethereum’s Layer2 solutions—like Optimistic Rollups and ZK-Rollups—record simplified transaction data on Ethereum’s mainnet, leveraging Ethereum’s security to protect Layer2 operations. While Layer2 handles high-volume transactions independently, its ultimate security depends on Ethereum’s consensus.
These examples illustrate the essence of shared consensus security: developers can build scalable sub-chains or Layer2 networks while maintaining mainchain-grade security.
So why must Bitcoin Layer2 share Bitcoin’s consensus security?
The reason is now crystal clear.
All major Layer2s lack independent consensus—they exist only by relying on the mainchain’s consensus. Take Ethereum Layer2s: Arbitrum, zkSync, Base—all depend entirely on centralized sequencers (typically operated solely by the project team) to submit batched data to Ethereum. Their security and trustworthiness ultimately derive from Ethereum’s mainnet.
In other words, Ethereum Layer2s inherit Ethereum’s consensus security. Users don’t trust these Layer2s for their own merits—they trust them because they trust Ethereum.
If a Bitcoin Layer2 cannot inherit Bitcoin’s consensus security, then it is not a true Bitcoin Layer2. Without Bitcoin’s network securing it, such a Layer2 cannot earn genuine user or capital trust. (After all, users must deposit real funds into Layer2s—how can they participate without trust?)
This is the fundamental challenge facing all Bitcoin Layer2s today.
Two data points further support this argument:
First: TVL Comparison Between Bitcoin Layer2 and Ethereum Layer2
Currently, Bitcoin Layer2 TVL stands at ~$1.45 billion, while Ethereum Layer2 TVL is ~$36 billion (source: footprint.network)—more than 25x difference. This reflects vastly lower capital confidence in Bitcoin Layer2 compared to Ethereum Layer2.
Second: Average Market Cap Comparison
Most Bitcoin Layer2 projects have market caps below $1 billion (many under $500 million), whereas leading Ethereum Layer2s typically range between $5 billion and $10 billion. That’s a 5–10x gap, indicating significantly weaker investor confidence in the Bitcoin Layer2 sector.
According to the “attack cost theory,” Bitcoin’s consensus security is over four times stronger than Ethereum’s. Therefore, Bitcoin Layer2 should theoretically command valuations at least four times higher than Ethereum Layer2—but the reality is the opposite!
Why?
Because nearly all Bitcoin Layer2s fail to share Bitcoin’s consensus security. They launch unrelated chains coupled with multi-sig setups and label themselves “Bitcoin Layer2,” hoping to exploit the Bitcoin narrative and airdrop hype to gain trust. But real-world data reveals the true sentiment of capital and users.
Bitcoin Layer2s that cannot inherit Bitcoin’s consensus security simply cannot earn user trust!
No wonder the entire Bitcoin Layer2 space feels so broken—the root cause lies here.
But is there truly no Bitcoin Layer2 capable of sharing Bitcoin’s consensus security?
Actually, there is one.
It’s the Lightning Network.
The Lightning Network manages to sustain over 5,000 BTC in circulation—without any token incentives. This exceeds most so-called Bitcoin Layer2s that rely heavily on token rewards to attract BTC deposits.
Why?
One reason: the Lightning Network fully inherits Bitcoin’s consensus security.
People use the Lightning Network because they trust Bitcoin’s security—and know that Lightning offers equivalent safety. That’s the crux of the matter.
How Does the Lightning Network Achieve Shared Consensus Security?
Here’s how it works:
Lightning nodes can freely establish payment channels (originally proposed by Satoshi Nakamoto). Opening a channel involves creating signed outputs on the Bitcoin blockchain; closing it requires broadcasting the final state back to the mainchain—this is the core mechanism enabling shared consensus security. (Note: Ethereum’s Layer2 rollup designs were directly inspired by Lightning’s state channel concept.)
Each channel update generates a new commitment transaction, which can be broadcast to the Bitcoin mainnet if needed. These commitments ensure that even if one party becomes uncooperative, the other can close the channel and reclaim their funds by submitting the latest valid transaction. This mechanism directly relies on Bitcoin’s consensus rules and security—meaning Lightning’s safety is guaranteed by Bitcoin itself. It fully shares Bitcoin’s consensus security.
The fact that the Lightning Network can maintain over 5,000 BTC in circulation—without token incentives—is powerful proof of the trust derived from shared consensus security.
Of course, the Lightning Network has limitations.
It supports only payments and lacks support for complex smart contracts.
*Super Bitcoin* identifies this limitation and proposes a solution: treat Bitcoin as the base settlement layer, Lightning Network as the sole Layer2, then upgrade isolated Lightning nodes into chain-like nodes capable of executing smart contracts. This breaks Lightning’s restriction to simple payments, enabling full programmability—while preserving shared consensus security. In essence, it enables infinite scalability for Bitcoin without compromising security.
Beyond that, Super Bitcoin introduces modular abstraction, allowing various Lightning Chains built on the Super Bitcoin modular stack to inherit Bitcoin’s consensus security. This is Super Bitcoin’s proposed framework. For more details, refer to the whitepaper: https://bevm-blog.webflow.io/post/super-bitcoin-a-value-internet-sharing-bitcoins-consensus-security
To summarize:
By studying the importance of “shared Bitcoin consensus security” for Bitcoin Layer2, I’ve uncovered the deep-rooted reason why the Bitcoin Layer2 sector feels so underwhelming—they fail to share Bitcoin’s consensus security!
If Bitcoin Layer2 is to achieve real growth in the future, it must return to Bitcoin’s fundamentals and figure out how to genuinely inherit its consensus security. The Lightning Network—the only existing Bitcoin Layer2 that truly shares Bitcoin’s consensus security—offers valuable lessons. Anyone serious about building Bitcoin scaling solutions should look back to Bitcoin itself, embrace the direction of shared consensus security (e.g., extending from the Lightning Network). That may well be the only viable path forward.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
Web3CN
