Questions have been raised as to whether Bitcoin is becoming a multi-layered system. Well, the answer is yes. This article seeks to outline the various layers on which Bitcoin rests. It’s all yours!
Have you heard of those who call Bitcoin digital gold? It is clear that cryptocurrency is rapidly gaining popularity and recognition in the crypto world. The value of the coin is estimated to rise even higher. However, it is also noted that the coin can gain or lose 50% of its value overnight. This is causing speculation among investors, but the coin is “digital gold” nonetheless. And to the question of whether Bitcoin is a multi-layered system, it is worth knowing that Bitcoin exists on two main layers. This is mining and semantic layers.
This is the layer in which the coin is created. In addition to bitcoins, ether is also created in this layer. After the coins are created, the actual bitcoin blocks are transferred to the ledger. This is where the currency is generated. It should be noted that the currency is generated from the transactions contained in the Bitcoin blocks. Blocks are known as transaction fees. Currency can also be obtained from the network itself or you can say “out of the air”. The main advantage of generating currency from the network is that it provides incentives for miners.
It provides a very important platform. The semantic layer is the layer where Bitcoin is used as a means of payment. It also provides a platform to use Bitcoin as a store of value. Layer seems very important, doesn’t it? Bitcoin holders sign valid transactions that signal the start of Bitcoin transfers between semantic layer nodes. Transfer can also be done by creating smart contracts. Smart contracts transfer coins between different accounts.
You probably haven’t heard of the Lightning Network. This is the latest invention developed by the Bitcoin community. This level will be able to run on bitcoins. Thanks to this invention, there will be an application layer that sits on top of Bitcoin. It will be so exciting. The most interesting thing is that its value can also be used to make payments. This will be possible thanks to the transportation of its value between people. With the invention of the lightning network, Bitcoin will become a transport layer as well as an application layer.
As of today, Bitcoin is estimated to be worth approximately US$9 billion. Bitcoin is also known to be a decentralized cryptocurrency. This means that it works without the control of the bank or administrator. Bitcoin is surely taking the crypto world by storm.
It is also important that the technology used in Bitcoin mining is called blockchain technology. It works by allowing the distribution of digital information, not copying. Crypto is a really exciting topic and Bitcoin may overtake our major currencies in the near future.