Bitcoin Is Venice Scaling Layers


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This article is part of a series of adapted excerpts from “Bitcoin Is Venice” by Allen Farrington and Sacha Meyers, which is available for purchase in Bitcoin Magazine’s store now.

You can find the other articles in the series here.

“Money will always see a multiple layered expansion as it evolves, and each layer has costs and benefits. You can mine your own gold, but this process is very expensive with a high barrier to entry. You can buy gold coins and bars easily in most parts of the world, but using them for day to day commerce is unfeasible. As a merchant, you can accept gold coins but either have to trust the purity or assay the gold yourself. Once you’re using the paper certificate layers, you now are engaged in counterparty risk, but have easier capacity for transactions. Each layer serves a different function. Base layers are for final settlement, while higher layers are for facilitation of economic activity.” — Nik Bhatia, “The Time Value of Bitcoin and LNRR.”

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