Unraveling Bitcoin’s protective blockchain layers – and their future expansion
Blockchain security keeps the cryptocurrency ecosystem stable in the world of fast-paced technology. Although the underlying protocol was formed around 1982 based on a popular cryptographer’s dissertation, the blockchain we know today was introduced by Satoshi Nakamoto, the creator of Bitcoin.
The modern design includes features such as the mining hash rate, timestamps, and transaction data, all contributing to a seamless investing experience for the regular user. As the Bitcoin price increased over the years, the system behind transactions became more sophisticated, facing continuous cybersecurity challenges. However, due to cryptography, you can buy Bitcoin with bank transfer safely.
Despite high-security levels, the risk of 51% attacks is still prominent. So, to better manage safety, Bitcoin’s blockchain layers are developing and expanding to offer a broader defense. Let’s learn about them.
Basic layers of a blockchain’s infrastructure
Theoretically, five blockchain layers are used as a standard when developers create one. Although there are numerous variations, these are the essential layers:
- Infrastructure is the foundation consisting of software and hardware. This is where developers decide if the blockchain is public or private through permissionless or permissioned features. The infrastructure layer leverages nodes to maintain functionality;
- Data structures enhance symmetry and asymmetry as part of the encryption model, an important safety component. This makes it easy for validators and miners to verify transactions as they are put into data blocks;
- The network is where all the communication happens between data and nodes. The blockchain does not automatically accept data as genuine, so nodes use mechanisms to verify it so no hacker can compromise the network identity;
- The protocol allows network peers to reach consensus mechanisms. The protocol consists of the mechanism, PoW in this case, but it can also contain a sidechain, like in the case of Ethereum, that operates along the primary chain;
- An application is a network interface through which users utilize products or services. Applications are based on smart contracts, and they’re often used in decentralized websites and mobile crypto apps;
Bitcoin’s Layer 1 for on-chain transactions
The first security layer of the Bitcoin blockchain, also known as the mainchain, is home to the distributed ledger, nodes, and PoW consensus. From a technical perspective, the first layer isn’t complex at all, as the scripting language and programmability are quite straightforward. However, this is exactly why the blockchain is safe―it’s not losing itself among complicated technologies.
Layer 1 deals with changing block sizes and splitting databases, so it’s considerably important. Still, it’s prone to blockchain forks that devalue the cryptocurrency by making two networks run at the same time. On the other hand, since the blockchain expanded considerably, it gets harder to verify, especially in off-chain networks. That’s why more layers were added.
Lighting Network as a Layer 2 foundation
In blockchains, security layers can be built on top of previous ones to enhance stability and communication. In Bitcoin’s case, the Lighting Network was created on top of Layer 1, which handles micro-payments for retail and institutional users through peer-to-peer channels, making payments instant.
The Lighting Network maintains off-chain channels through smart contracts to increase transaction speeds and lower transaction fees. Therefore, Bitcoin has become more scalable and safer. In addition to micro-payments, the Lighting Network is also useful in gaming.
The Liquid Network as an additional layer
The Liquid Network is another Layer 2 solution that acts as a sidechain to improve Bitcoin’s performance. The layer helps developers build applications on Bitcoin because it works independently and has a unique consensus mechanism.
Besides that, the Liquid Network establishes a link between stablecoins and NFTs with the Bitcoin blockchain, so it borrows features from Ethereum and other similar networks, making Bitcoin more approachable. Transactions on the Liquid Network are also faster and safer since they’re confidential regarding third-party viewers.
EVM-based RSK layer
The Rootstock layer, or RSK, is a unique technology that enables the EVM smart contract feature to connect with Ethereum. The RVM (RSK Virtual Machine) makes transactions doable in 20 seconds and secures blocks by leveraging the merged mining concept.
RSK is another sidechain like the Liquid Network, so it operates in parallel to the base layer since it also has its own native assets. Its best use cases include DeFi and data insights, and everyone can build applications on top of it.
Stacks programming language
Bitcoin primarily uses the C++ programming language, which is significantly efficient, but some developers prefer Python for simplicity. Still, some developers might use other languages due to Bitcoin’s adaptability.
But there’s another programming language involved. Stacks is the programming layer through which users can leverage smart contracts on Bitcoin by offering the Proof-of-Transfer consensus. The technology ensures that all blocks live on the Bitcoin blockchain from transactions and decentralized applications created with the smart contract language Clarity. Stacks are considerably helpful in DeFi, NFTs, and Blockchain Naming Systems.
Bitcoin will borrow more Ethereum technology to grow its Layer 2 ecosystem
Although Bitcoin hasn’t passed the Ethereum update countdown, it has surely improved in the past years to reach adoption faster. In the future, we expect more similar updates inspired by the Ethereum blockchain and technology since it excels at upgrading it.
A recent project from a Singapore-based blockchain group that partnered with the Bitcoin Frontier Fraud showcases that Bitcoin might mirror Ethereum more in terms of architecture. The best example of a change is the Ordinal protocol, which brought NFTs to Bitcoin in a unique form but totally inspired by Ethereum’s NFT technology. On the other hand, current layers will still be improved to offer basic safety. For instance, Stacks will receive a Nakamoto Release upgrade to make transactions cheaper and faster on the second layer.
What do you think about Bitcoin’s underlying technology?
Bitcoin is the first blockchain to provide the most used cryptocurrency in the world, making it a reliable store of value and a potential legal tender. The blockchain powering it up isn’t one of the most complex, but its simplicity brought it to fame. However, the Bitcoin blockchain still needs to mitigate challenges, so it enhances its layers and creates new ones to keep up with the latest technological provocation.
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