I have a question regarding Level 2 vs Level 3 switches. Most of the switches from big boys (Qnap/etc...) are Level 2. Some of the Chinese switches add Level 3 and VLAN capabilities. So my question: Do I need a level 3 switch? If yes why do so many name brand switches offer only Level 2. I'm building a home network - Gaming/PC/Plex/AppleTV etc... I want to play with Docker/PFSense/whatever comes down the way. Am I limited with choosing a Level 2 switch? Thanks
You first have to understand what "Layer 2" and "Layer 3" really are referring to. I'm not IT Professional but layer 2 is routing done at the MAC address level and Layer 3 is routing done at the IP address level. In laymen's terms, you need Layer 3 to cross over network segments while layer 2 handles data traveling on the same network segment. In a normal residential network, the router is the only layer 3 device and the switch is a layer 2 device (handling routing via ARP tables). This means that any traffic that needs to cross over a network segment (whether that is to/from an external network - ie the internet - or across a VLAN on the same local network) has to traverse through the router. But all data flowing between devices on the same network segment can by handled by a layer 2 device and that traffic doesn't need to go to the layer 3 device during it's transit.
A switch that has been set up as a true layer 3 switch is able to route things at both the IP address level and the MAC address level. This means that gateways and routing rules (called ACLs) are created in the switch instead of in the router. In fact, networks that have set up their switches as layer 3 devices typically don't have a firewall/router because the switch is handling all of that functionality (DHCP, ACLs, gateways, VLAN management, etc).
I firmly believe that running switches as true layer 3 devices in a typical residential network is completely overkill and unneeded. What I mean by that is that if you are an IT professional that works with layer 3 switches everyday and it's second nature for you to set up networks like this, then it is fine. But if you don't know how to do this already, there is no need to go out and learn how to set up switches for layer 3 functionality. It's simply not worth the effort IMHO. The traditional home network configuration where you have a router acting as the layer 3 device and your switches are acting as layer 2 devices works great and is easy to set up, even with VLANs.
Therefore I think a MUCH better question for a typical residential network is do you want
managed or
unmanaged switches for your primary networking switches. If you are on this forum, then I think the answer to that question is always going to be managed switches - specifically managed switches that support VLANs (the 802.1Q networking standard). Sometimes these switches are called VLAN aware switches. There is a very high likelihood that you will eventually want to run VLANs on your residential network, so make sure the managed switch you choose can support them.
Outside of that, it really doesn't matter if the switch is layer 2 (with VLAN support) or layer 3. You can get a "layer 3" switch and never use any of the functionality that makes it layer 3 - effectively keeping it a layer 2 switch. Conversely, the odds of you actually wanting all of that layer 3 functionality is also very low, so purchasing a layer 2 switch that supports VLANs isn't likely going to hold you back either. In other words, don't make your switch purchase based on whether it is layer 2 or layer 3. It's more important to buy a managed switch (with VLAN support) that has the port configuration (speed, number, type, etc) that you need vs worrying about if it is layer 2 or layer 3.
Hopefully that helps!