Galaxy Research Warns of Sustainability Issues with Bitcoin Layer2 Rollups

An Aug. 4 report from Galaxy Research suggests that despite the popularity of Bitcoin Layer 2 extension networks such as 'Rollups' as promising ways to keep Bitcoin payments cheap, fast and decentralized, they may not be sustainable in the long term.
In a report released Friday, Galaxy analyst Gabe Parker emphasized the cost of distributing data as a fundamental challenge for Bitcoin Rollups, which need to distribute data to the base tier.
Galaxy Research estimates that in a low-fee environment, with a common transaction fee of 10 sat/VB (satoshi per vByte, a unit of block space data), Rollups would need to spend $460,000 per month to maintain Bitcoin's security. And in a higher-fee environment, with a fee of 50 sat/VB, the monthly cost could skyrocket to $2.3 million.
“Alexei Zamayatin, co-founder of Build on Bitcoin (BOB), said Bitcoin Rollups can be as cost-effective as Ether Rollups, but he opposes the use of the Bitcoin main chain to provide data availability.
Zamayatin suggested using Celestia or a merged mining Bitcoin sidechain, which is cheaper but sacrifices some of Bitcoin's full decentralization and security.
Responding to Galaxy's report, Zamayatin said, “If the Bitcoin Layer 2 network is 100 times more expensive than the Ether Layer 2 network, no one will use it, even if 'it's on Bitcoin. The good news is: they won't be more expensive.