Layer 1 vs Layer 2 are terms used to describe the architecture of blockchain networks. Layer 1 refers to the base protocol, like Bitcoin or Ethereum, where the primary blockchain operations occur. It ensures security, decentralization, and consensus but can suffer from scalability issues. Layer 2, on the other hand, is built on top of Layer 1 to improve scalability, transaction speed, and reduce costs. Solutions like the Lightning Network (for Bitcoin) and Optimistic Rollups (for Ethereum) are examples of Layer 2 enhancements to Layer 1 blockchains.