Questions have arisen as to whether bitcoin has become a multilayered system. Well, the answer is yes. This article seeks to outline the different layers in which bitcoin is located. It’s all yours!
Have you ever heard of those who call bitcoin as digital gold? Clearly, crypto-currency is quickly gaining popularity and acceptance in the crypto world. The value of the coin is estimated to rise even higher. However, it is also known that the coin can gain or lose 50% of its value overnight. This has led to investors ’speculations but the coin is nonetheless a“ digital gold ”. And on the question of whether bitcoin is a multilayered system, it should be noted that bitcoin exists in two main layers. These are mining and the semantic layers.
The mining layer
This is the layer where the coin is made. In addition to bitcoins, ether is also created in this layer. After creating the coins, the valid blocks of bitcoins are transferred to the ledger. Here, making money is done. It should be noted that the currency is generated from transactions contained in blocks of bitcoins. Blocks are known as transaction fees. Money can also be generated from the network itself, or you can say ‘‘ out of thin air ’’. The main advantage of generating money from the network is that it provides incentives to miners.
The Semantic Layer
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. The layer seems very important, doesn’t it? Holders of the bitcoin currency sign valid transactions that announce the start of the transfer of bitcoins between nodes in the semantic layer. The transfer can also be made by making smart contracts. Smart contracts transfer coins between different accounts.
The lightning network
You may not have heard of the lightning network. This is the latest invention launched by the bitcoin community. This layer has the ability to run on top of bitcoin. With this invention, comes an application layer that is on top of bitcoin. Very exciting. The most interesting aspect is that its amount is also applicable to payment. This can be made possible by bringing its value among the people. With the invention of the lightning network, bitcoin can become a transportation layer as well as an application layer.
Currently, the value of bitcoin is estimated at about $ 9 billion US. It is also known that bitcoin is a decentralized cryptocurrency. This means it will operate without the control of a bank or an administrator. Bitcoin is definitely taking over the crypto world.
Also importantly, that is why the technology used during bitcoin mining is called blockchain technology. It works by allowing the distribution of digital information, and not copying. Cryptos is really an exciting topic and in the near future bitcoins could catch up with our mainstream currencies.