A multi-layered cryptocurrency

Questions have arisen as to whether bitcoin is turning into a multi-tiered system. Well, the answer is yes. This article seeks to outline the various layers on which bitcoin lies. It’s all yours!

Have you heard of those who call bitcoin digital gold? It is clear that cryptocurrency is rapidly gaining popularity and acceptance in the crypto world. The value of the coin is estimated to increase. However, it is also noted that a coin can gain or lose 50% of its value overnight. This causes speculation among investors, but the coin is still “digital gold”. And on the question of whether bitcoin is a multi-layered system, you should know that bitcoin exists on two main layers. These are mining and semantic layers.

Mining layer

This is the layer where the coin is created. In addition to bitcoin, ether is also created in this layer. After a coin is created, valid bitcoin blocks are transferred to the ledger. This is where the currency generation is complete. 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 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 gives incentives to miners.

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 valid transactions that signal the start of bitcoin transfers between nodes at the semantic layer. The transfer can also be enabled by creating smart contracts. Smart contracts transfer coins between different accounts.

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 run on bitcoin. With this invention, there will be an application layer on top of bitcoin. It will be so exciting. The most interesting aspect is that its value can also be used for payment. This will be made possible by the transfer 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, the value of Bitcoin is estimated to be around 9 billion US dollars. Bitcoin is also known to be a decentralized cryptocurrency. This means that it works without bank or administrator control. Bitcoin is certainly taking over the crypto world.

It is also important that the technology used during bitcoin mining is called blockchain technology. It works by enabling digital information to be distributed rather than copied. Crypto is a really exciting topic and in the near future bitcoins may overtake our mainstream currencies.