Questions have arisen about whether Bitcoin will become a multi-layered system. Well, the answer is yes. This article attempts to describe the different layers that bitcoin sits on. It’s all yours!
Have you heard people refer to Bitcoin as digital gold? Clearly, cryptocurrency is rapidly gaining popularity and acceptance in the cryptocurrency world. The value of the coin is predicted to rise further. However, it is also noted that the coin can gain or lose 50% of its value overnight. This leads to speculation among investors, but the coin is still “digital gold”. And to the question of whether or not bitcoin is a multi-layered system, you need to know that bitcoin exists in two main layers. These are mining and semantic layers.
This is the layer from which the coin is created. Along with bitcoins, ether is also created in this layer. Once coins are created, secure blocks of bitcoins are transferred to the ledger. Currency production is carried out here. It should be noted that the currency is obtained from transactions in bitcoin blocks. Blocks are known as transaction fees. Currency can also be generated from the network itself or you can say “out of the air”. The main advantage of creating currency from the network is that it gives incentives to miners.
It 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. Layers seem pretty important, don’t they? Holders of bitcoin currency sign valid transactions that indicate the initiation of the transfer of bitcoins between nodes at the semantic level. Transfer can also be possible through the creation of smart contracts. Smart contracts transfer coins between different accounts.
You probably haven’t heard of the lightning network. This is the latest invention introduced by the bitcoin community. This layer will be capable of running on top of bitcoin. With this invention will come an application layer on top of bitcoin. It will be very exciting. The most interesting thing is that its value can also be used to pay. This will be possible by carrying its value among people. With the invention of the lightning network, bitcoin will become both a transport layer and an application layer.
Today, bitcoin is estimated to be worth around $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 definitely taking the crypto world by storm.
In addition, the technology used during the mining of bitcoin is called blockchain technology. It works by allowing digital information to be distributed, not copied. Cryptocurrencies are a really interesting topic and in the near future bitcoins may surpass our major currencies.