The Multilayered Cryptocurrency

by cryptheory

March 28, 2025

in Guest Post

Reading Time: 2 mins read

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

Have you heard of those who refer to bitcoin as digital gold? Clearly, the crypto-currency is quickly gaining popularity and acceptance in the crypto world. The value of the coin is estimated to rise higher. However, it is also noted that the coin can gain or lose 50% of its value overnight. This causes speculations amongst investors but the coin is nevertheless a ”digital gold”. And to the question of whether bitcoin is a multilayered system, it should be known that bitcoin exists on two main layers. These are the mining and the semantic layers.

The mining layer

This is the layer in which the coin is created. Besides bitcoins, ether is also created in this layer. After creation of the coins, valid blocks of bitcoins are transferred to the ledger. Here, currency generation is done. It should be noted that the currency is generated from transactions which are contained in the blocks of bitcoins. The blocks are known as transaction fees. The currency can also be generated from the network itself, or you can say ”from the thin air”. The main advantage of generating currency from the network is that is provides incentives to the miners.

The Semantic Layer

This provides a very important platform. The semantic layer is the layer in which 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, isn’t it? The holders of bitcoin currency sign the valid transactions which signal the start of transferring the bitcoins among the nodes at the semantic layer. The transfer can also be made possible by the creation of smart contracts. The smart contracts transfer the coins between different accounts.

The lightning network

You’ve probably not heard of the lightning network. This is the latest invention being rolled out by the bitcoin community. This layer will have the ability to run on top of bitcoin. With this invention, there will come an application 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 transporting 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 about $9 billion US. It also known that bitcoin is a decentralized cryptocurrency. This means that it works without the control of a bank or an administrator. Bitcoin is surely taking over the crypto world.

Also of importance, is that the technology used during mining of bitcoin is called blockchain technology. It works by allowing the distribution of digital information, and not copying. Cryptos are really an exciting topic and in the near future bitcoins could overtake our mainstream currencies.

Lisa An Freeman