I have always wondered if we would get a scalability problem on the Hive blockchain when the number of dApps submitting transactions increases. I understand that the current quota given is pretty much sufficient but I was wondering if having a second layer can solve this problem. Currently, there are already sidechains available on Hive. Hive Engine is one popular side chain and DLUX/SPKCC is another side chain slowly gaining popularity.
All these sidechains currently use the Custom JSON feature on Hive Blockchain to record transactions on Hive and with that, the second layer is created. To understand more about this, I would like to take Hive Engine as an example and explain how this happens. Hive Engine is a second-layer blockchain database. Mongo database is used to record the blockchain data. When the transaction is broadcasted as custom JSON on Hive and if the format of the transaction is understandable or as defined on Hive Engine, it will be processed by Hive Engine code and recorded on the second layer chain. While recording the transaction, verification is also done to make sure the data processed is the correct data.
As the transactions are recorded based on the custom JSON data on the Hive Engine blockchain, it is easy to build the entire sidechain database back from scratch if we have to replay it from the Genesis block. There is also a possibility that someone can submit a fake transaction as a custom JSON. Imagine if someone is submitting a transaction from A to B. Imagine a case where A does not even have sufficient balance and still trying to transfer. Cases like these will accept the transaction data on Hive but when it comes to adding the data or making changes on Hive Engine, that is when validation happens and an error message will be thrown saying that the balance was not sufficient.
Creating a second layer side chain is fun and this can be done for any use case by anyone. Currently other DApps on Hive that issue NFTs to the users have their associations with Hive Engine code. But there is also a possibility that each one of them can have their own version of Hive Engine and record the data on the Hive blockchain accordingly. A game that is built on top of Hive can exclusively have their side chain running directly on Hive and have all their functionalities bound to Hive. This would introduce lots of possibilities on Hive. I believe that is how DLUX explored the opportunity to create their own side chain and also explored a possibility with IPFS too.
If you like what I'm doing on Hive, you can vote me as a witness with the links below.
@balaz as a Hive Witness 
@kanibot as a Hive Engine Witness|
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