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Galaxy Research warns of sustainability issues for Bitcoin Layer 2 Rollup

Galaxy Research warns of sustainability issues for Bitcoin Layer 2 Rollup

CointimeCointime2024/08/05 02:07
By:Cointime

On August 4th, according to Cointelegraph, Galaxy Research pointed out in its report that although Bitcoin layer-two scaling solutions such as Rollups are popular for maintaining low-cost, fast, and decentralized Bitcoin payments, they may not be sustainable in the long term. Galaxy Research estimates that in a low-fee environment, the average transaction fee is 10 sat/VB (satoshis per vByte, a unit of block space data), and Rollups need to spend $460,000 per month to maintain Bitcoin security. In a high-fee environment, where the fee is 50 sat/VB, the monthly cost could skyrocket to $2.3 million. Galaxy Research analyst Gabe Parker emphasized that for Bitcoin Rollups to thrive, they must generate significant revenue from transaction fees on their own network, which must come from many users willing to pay for layer-two network transactions.

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