Questions have arisen as to whether Bitcoin is becoming a multi-layered system. Well, the answer is yes. This article seeks to outline the various layers upon which Bitcoin rests. It’s all yours!
Have you heard of those who call Bitcoin digital gold? Clearly, cryptocurrency is rapidly gaining popularity and acceptance in the crypto world. The value of the coin is expected to rise. However, it is also noted that the coin can gain or lose 50% of its value overnight. This causes speculation among investors, but the coin is “digital gold” nonetheless. And to the question of whether bitcoin is a multi-layered system, it should be known that bitcoin exists on two main layers. These are mining and semantic layer.
The mining layer
This is the layer where the coin is created. In addition to bitcoins, ether is also created in this layer. After the coins are created, the valid bitcoin blocks are transferred to the ledger. This is where currency generation takes place. It should be noted that the currency is generated from transactions that are contained in the Bitcoin blocks. Blocks are known as transaction fees. The currency can also be generated from the network itself or you can say “out of thin air”. The main advantage of generating currency from the network is that it provides incentives for miners.
The semantic layer
This provides a very important platform. The semantic layer is the layer where bitcoins are used as a means of payment. It also provides a platform for bitcoins to be used as a store of value. The layer seems very important, doesn’t it? Holders of Bitcoin currency sign the valid transactions, which signal the beginning of the transfer of Bitcoins between the nodes of the semantic layer. Transfer can also be made possible through the creation of smart contracts. Smart contracts transfer the coins between different accounts.
The Lightning Network
You probably haven’t heard of the Lightning Network. This is the latest invention introduced by the Bitcoin community. This layer will have the ability to work on Bitcoin. With this invention, there will be an applied layer that is on top of Bitcoin. It will be so exciting. The most interesting aspect is that its value can also be used to make payments. This will be made possible by transferring 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, the value of Bitcoin is estimated to be around 9 billion US dollars. Bitcoin is also known to be a decentralized cryptocurrency. This means it works without the control of a bank or administrator. Bitcoin is certainly 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 digital information to be distributed, not copied. Cryptocurrencies are a really exciting topic, and in the near future, bitcoins may displace our major currencies.