The Future of Multi-Layer Blockchain Infrastructures in Enterprise Use Cases

The application of blockchain technology has expanded much more than its initial application in cryptocurrencies. The use of blockchain to enhance the level of transparency, security, and efficiency in operations is gaining popularity in the world of business today. Multi-layer blockchain infrastructure is one of the most promising directions of this sphere.

This model separates blockchain systems into various layers, with each layer performing a certain task. This essay will explain the future of multi-layer blockchain infrastructures in enterprise applications in a very simplistic language and using practical examples.
Multi-layer blockchain infrastructure implies that all the operations are not executed on a single blockchain but on several layers.

The Layer 1, also referred to as the base layer, deals with security, decentralization, and trust. Over and above this Layer 2 and occasionally Layer 3 solutions deal with speed, scalability, and application specific functionality. This architecture can resolve most of the challenges encountered with the traditional single-layer blockchains, including low transaction rates and expensive nature.

Image Source

The layered approach is highly significant to businesses that involve high volumes of data and transactions. Scalability is one of the most significant factors why enterprises are interested in multi-layer blockchains. Large organizations have thousands or even millions of transactions. When many users are operating simultaneously in a single-layer blockchain, it becomes slow and inexpensive.

A multi-layer system allows pushing heavy transaction workloads to higher layers, with final results being recorded only by the main blockchain. This makes the system faster and congested. In my opinion, this scalability benefit will continue to push more firms towards the multi-layer blockchain systems in the future.

Another advantage of multi-layer blockchain infrastructures is security. Business houses are involved with sensitive information like financial records, customer details, and supply chain information. A layered system ensures that the most vital security functions are on the bottom layer which is highly decentralized and very difficult to attack.

The rest of the layers are customizable to be fast and flexible without compromising the overall security of the system. Such a balance between security and performance is what enterprises have been seeking, and multi layer blockchains provide a solid answer.

The future of enterprise blockchain use, interoperability will also contribute. The fact is that a lot of companies already have various software systems that should be able to communicate with one another. The multi-layer blockchain infrastructures may be structured in a way that they communicate with other blockchains and conventional systems more easily.

As an illustration, a layer may be used to drive communication between blockchains, whereas the other may be dedicated to business reasoning. This simplified the integration of blockchain in the current operations of enterprises without necessarily having to start afresh.

Image Source

Cost efficiency is another crucial area. Direct execution of transactions using a main blockchain may prove to be costly, particularly when the network is busy. Multi-layer systems ensure cost-saving by moving small and frequent transactions to less expensive layers. The main layer is used to store only important data.

This model is highly appealing to businesses that are attempting to cut on the expenses of operation. In my own opinion, cost-saving will be the sole factor that will encourage several businesses to think seriously about multi-layer blockchain solutions.

Multi-layer blockchain systems can introduce significant changes in major aspects in enterprise applications such as supply chain management. It is possible to track goods, verify authenticity and handle payments by using various layers. Higher layers are able to work on the data real-time, whereas final records are stored on the lower layer. This enhances transparency and trust amongst partners.

I have observed that firms are appreciating systems that minimize conflicts and enhance accountability, and that is what layered blockchains are all about. Multi-layer blockchain systems will also be of great value to financial services. Banks and payment providers require high-speed transactions, good security and regulation.

Multi-layer infrastructure enables them to build privately or permissioned overlay on top of public blockchains. This implies that they will be able to comply with the regulatory demands and at the same time experience the advantages of decentralization. I imagine that even more financial institutions will use this hybrid approach in the future.

Although all these benefits can be seen, there are issues. Multi-layered blockchain networks are potentially difficult to maintain and develop. Businesses will require the services of qualified developers and well-documented governance models. Regulatory uncertainties also exist in most countries. Nevertheless, these issues will probably diminish with the development of technology and clarity of the standards. I think that education and partnership among the blockchain developers and businesses would be the main key in winning over these problems.

To sum up, multi-layer blockchain infrastructures in enterprise applications have a highly promising future. Layered blockchain systems are able to solve most of the issues that have hindered the adoption of blockchain in the past due to their ability to provide scalability, security, interoperability and affordability.

Multi-layer blockchain infrastructures will emerge as a powerful source of innovation as companies keep seeking improved digital solutions. I believe that this technology will see its transformation into experimentation and mass enterprise in the next few years.