Questions have arisen about whether Bitcoin is turning into a multi-layered system. Well, the answer is yes. This article aims to provide an overview of the various layers that Bitcoin sits in. It’s all yours!
Have you heard of those who refer to Bitcoin as digital gold? Clearly, cryptocurrencies are rapidly gaining popularity and acceptance in the crypto world. It is estimated that the value of the coin will be higher. However, it is also important to note that tokens can gain or lose 50% of their value overnight. This has caused speculation among investors, but the coin is still “digital gold.” And for the question of whether Bitcoin is a multi-layered system, it should be known that Bitcoin has two main layers. These are mining and semantic layers.
This is the layer where the coins are created. In addition to Bitcoin, this layer also creates Ethereum. After coins are created, valid Bitcoin blocks are transferred to the ledger. At this point, currency generation is complete. It should be noted that currency is generated from transactions contained in Bitcoin blocks. These blocks are called transaction fees. Currency can also be generated from the network itself, or you can say “generated out of thin air”. The main advantage of generating currency from the network is to provide incentives for miners.
This provides a very important platform. The semantic layer is the layer that uses Bitcoin as a means of payment. It also provides a platform for Bitcoin to be used as a store of value. Layers seem to be important, don’t they? Bitcoin holders sign a valid transaction, which marks the beginning of Bitcoin transfers between semantic layer nodes. Transfers can also be achieved by creating smart contracts. Smart contracts transfer coins between different accounts.
You may not have heard of the Lightning Network. This is the latest invention from the Bitcoin community. This layer will be able to run on top of Bitcoin. With the present invention, there will be an application layer on top of Bitcoin. It will be very exciting. The most interesting aspect is that its value can also be used to pay. This will be achieved by transferring its value from person to person. With the invention of the Lightning Network, Bitcoin will be the transport layer and the application layer.
As of today, Bitcoin is estimated to be worth around $9 billion. As we all know, Bitcoin is a decentralized cryptocurrency. This means it can work without the control of the bank or administrator. Bitcoin will definitely take over the crypto world.
Just as importantly, the technology used in the Bitcoin mining process is called blockchain technology. It works by allowing digital information to be distributed rather than copied. Cryptocurrencies are indeed an exciting topic and Bitcoin may overtake our mainstream currency in the near future.