Galaxy Research Warns of Sustainability Issues with Bitcoin Layer2 Rollups

BlockBeats news, on August 4, a report from Galaxy Research pointed out that although Bitcoin second-layer expansion networks such as "Rollups" are popular as promising ways to keep Bitcoin payments cheap, fast and decentralized, they may not be sustainable in the long run.

In a report released on Friday, Galaxy analyst Gabe Parker emphasized that the cost of publishing data is a fundamental challenge facing Bitcoin Rollups because these Rollups need to publish data to the base layer.

Galaxy Research estimates that in a low-fee environment, with an ordinary transaction fee of 10 sat/VB (satoshi per vByte, the unit of block space data), Rollups will need to spend $460,000 per month to maintain the security of Bitcoin. In a higher-fee environment, the fee is 50 sat/VB, and the monthly cost may soar to $2.3 million.

Alexei Zamayatin, co-founder of "Build on Bitcoin" (BOB), said that Bitcoin Rollups can be as cost-effective as Ethereum Rollups, but he opposes using the Bitcoin main chain to provide data availability.

Zamayatin suggested using Celestia or a merged-mined Bitcoin sidechain, which is cheaper but sacrifices some of Bitcoin's full decentralization and security.

Zamayatin responded to Galaxy's report: "If Bitcoin's second-layer network is 100 times more expensive than Ethereum's second-layer network, no one will use it even if 'it's on Bitcoin'. The good news is: they won't be more expensive." (Cointelegraph)