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Under what circumstances, a second layer protocol is needed the most in Blockchain?

When the cryptocurrency on the top of blockchain started back in 2009, at that time the primary objective was decentralized system which aimed to disrupt the traditional and monopolized centralized system. So you can say, at that time the blockchain technology was first generation blockchain. With the passage of time the blockchain goes through the evolution process and with that process the various new use-cases and usability evolve in as an expansion to the dcentralized economy backed with blockchain technology. If 2009 was the 1st generation blockchain technology then in 2014, the birth of Etherum can be attributed as second generation blockchain technology and it on-boarded the smart contract in to the blockchain technology. 

The ecosystem of blockchain technology is further expanding and it is a continuous process and it is in that gradual process to make the entire world and the businesses to set into a decentralized ecosystem. So moving in to 2017-18, the use-cases of blockchain technology and its application further demands something more and this time it needs more dApps and hence more supportive environment which can enable those dApps to perform seamlessly. For that we need scalable blockchain and that gives rise to the birth of high scalable chain like EOS. So this can be attributed as a third generation blockchain.

But the second generation blockchain like Etherum has to perform better to remain in the race and with the passage of time it has to upgrade its technology and accomodate various other standards to remain in the demand space of the market and it should be such that it should not become obsolete or less competitive. So the second generation blockchains needs to perform better, scale better with low latency and in order to achieve that there is a requirement of second layer protocol which can make the user experience better. The second layer protocol mainly runs off the main chain and do not over burden the main chain and do not consume the resources of main chain. The best example of second layer solutions for Etherum are- Sharding, Plasma, Raiden Network etc. Raiden network facilitates off-chain transfer of ERC 20 tokens. In Sharding, simultaneous verification of data can be possible which can reduce the latency and hence can improve scalability. In Plasma, child chains are created on the top of main chain which relays the information to the main chain. So the second layers protocol can be considered as an upgradation to the second generation blockchain like Etherum to meet the requirement in the era of third generations where the smart economy demands enhanced scalability.