Overview of the 3 layer approach to scaling blockchains

1. Forget “Layer 2 scaling”,
bring on Layer 3 scaling!
An overview of the 3 layer method of scaling
blockchain currencies

2. 2 and 3 Layer scaling solutions
● Two layer approach with payment channels
○ Lightning network
○ Keep the Layer 1 resource usage small (small block)
● Three layer approach with multiexplorer nodes
○ Based on the Multiexplorer/Moneywagon API
○ No payment channels involved whatsoever
○ Load up layer 1 resource usage (big block)

3. Layer 1 Layer 2 Wallet Layer
Lightning
Node 1
Lightning
Node 2
Lightning
Node 4
Lightning
Node 5
Lightning
Node 3
Alice’s iOS wallet
supporting Lightning
protocol
Bob’s Android wallet
supporting Lightning
protocol
Low volume
settlements High volume via
“payment channels”

4. Layer 1 Layer 2 Wallet Layer
Lightning
Node 1
Lightning
Node 2
Lightning
Node 4
Lightning
Node 5
Lightning
Node 3
Alice’s iOS wallet
supporting Lightning
protocol
Bob’s Android wallet
supporting Lightning
protocol
Low bandwidth
settlements High bandwidth
payments
Cross-LN
routing

5. Problems with Layer 2
● Allows for anyone to run a full node easiely, but who will?
○ Blockchain already 80GB
● Inter-LN routing still not figured out

6. Layer 1 Layer 2 Layer 3 Wallet Layer
Android Wallet
supporting
multiexplorer
API
iOS Wallet
Supporting
multiexplorer
API
Server #1
Server #2
Server #3
Server #4
Server #5

7. Benefits of 3 Layers over 2 Layers
● Multiexplorer Nodes use less resources than full nodes.
○ Disk space: Definitely
○ Bandwidth: Maybe
● No paradigm change for wallets.

8. Is Layer 3 private?
● The “tor model” for privacy
○ The more multiexplorer nodes exist, the more private the system is for everyone
○ The more people that use this method, the more private the system is for everyone.
● A wallet is a collection of addresses. Wallets use a separate server for each
address. Each server only knows one of your addresses.
○ Can a multiexplorer node deduce the rest of your wallet addresses from one single address?
○ If your wallet has more addresses than multiexplorer nodes, privacy will degrade.
● Layer 2 can not de-anonymize the wallet layer
○ Layer 3 nodes are essentially proxy servers
● See multiexplorer “private mode”

9. Layer 1 Layer 2 Layer 3 Wallet Layer
Android Wallet
supporting
multiexplorer
API
iOS Wallet
Supporting
multiexplorer
API
Server #1
Server #2
Server #3
Server #4
Server #5
Address 1

10. Layer 1 Layer 2 Layer 3 Wallet Layer
Android Wallet
supporting
multiexplorer
API
iOS Wallet
Supporting
multiexplorer
API
Server #1
Server #2
Server #3
Server #4
Server #5
Address 2

11. Layer 1 Layer 2 Layer 3 Wallet Layer
Android Wallet
supporting
multiexplorer
API
iOS Wallet
Supporting
multiexplorer
API
Server #1
Server #2
Server #3
Server #4
Server #5
Address 3

12. Layer 1 Layer 2 Layer 3 Wallet Layer
Android Wallet
supporting
multiexplorer
API
iOS Wallet
Supporting
multiexplorer
API
Server #1
Server #2
Server #3
Server #4
Server #5
Address4

13. Layer 1 Layer 2 Layer 3 Wallet Layer
Android Wallet
supporting
multiexplorer
API
iOS Wallet
Supporting
multiexplorer
API
Server #1
Server #2
Server #3
Server #4
Server #5
Address5

14. Result
Address 1 - multiexplorer server #1 - routed to Coinbase.
Address 2 - multiexplorer server #2 - routed to Blockr
Address 3 - multiexplorer server #3 - routed to Coinbase
Address 4 - multiexplorer server #4 - routed to Blokchain.info
Address 5 - multiexplorer server #5 - routed to So Chain
Coinbase gets 2 of my addresses, but has no idea they came from the same
wallet, hence maximum privacy is preserved.

15. Isn’t the 3 Layer approach “centralizing”?
● Yes, the Layer 1 node count will drop to match the number of Layer 2 nodes.
○ AKA “DatacenterCoin”
○ Layer 2 node count will never be 1, as long as Bitcoin is popular
○ “Centralizing” is a terrible term to use here.

16. Layer 3 drawbacks
● No incentive to run a Layer 3 Node
○ But is “easiest” to run of all node types.
● Relies on the existence of a Layer 2.
○ If all exchanges dissappear, Layer 2 may become extinct
○ Blockexplorers may become extinct too… maybe/possibly

17. When will Layer 3 be complete?
● Its already complete! Ready to use today!
● https://multiexplorer.com/api
● Web wallet using the technique found at https://multiexplorer.com/wallet
● Android wallet / iOS wallet hopefully some day.
● The more peopel that use it, the better is it for everyone!
● Please consider running a Layer 3 node, instructions here: https://github.
com/priestc/Multiexplorer