Bitcoin Layer Three And The Move Away From Gimmicks

in LeoFinance2 months ago

Hey Jessatoshis

Bull markets are a bit of a distraction for me, short term price action takes over all the news, misallocates resources, and it makes it harder to get the news out on your product when everyone is in a price frenzy.

Building a product in a bull market may be exciting with people eager to invest or try out abs attention on the spade, but it can hurt your product if you're optimising for this behaviour.

Once this behaviour subsides abs the bears take over, your business model can quickly go bust. Building in a bear market is far quieter,

  • you know how much runaway
    and how many active users you are getting,
  • how many users you acquire per month

Building in quiet times

This stability makes it easier to adjust your marketing budgets, focus on the real issues to improve your product and build a substantial user base that wants to use the product and value its use.

With the frenzy, everyone is trying to get in, scalp profits, buy shitcoins and jump into DE-FI. Retail has arrived, and FOMO continues to spread across these markets.

So it’s easy for me to see why the idea of Bitcoin layer 3 can go under the radar. No one is going to care now or for many years, but it’s coming. It’s something to be really excited about using as it adds more functionality and uses cases for Bitcoin.


Layered money

I think if you've managed to find this post, you're pretty familiar with Bitcoin layer one, the base chain that moves UTXO's around with the support of the worlds largest distributed computing network.

Layer 1 to me involves mining, selling on-chain, running a full node, wallets that have private key access and are the way we secure all Bitcoin.

Bitcoin has several layers already, and it will add even more layers in the future as we require more people to own it and use it daily.

Second Layers

Layer 2 I've touched on in previous posts, but this refers to complementary networks that leverage the main chain.

These second layer solutions would be things like

Side Layers

I call this side layer myself; I don't feel it should be considered the second layer since it doesn't create a new network and uses the main-chain and only hypothecation of the coins.

I would refer to side layers like centralised exchanges or institutions and funds like PayPal and Square, SkyBridge, GrayScale or any ETFs coming soon, like the one we've seen launched in Canada.

These layers collect Bitcoin and centralise it in on-chain wallets and then allow you to own a representative asset like a share certificate or a balance hosted on a centralised server backed by on-chain Bitcoin.

So, what is layer 3 Bitcoin?

Bitcoin layer 3, to me, is when we break away from the gimmicks and actually create products that don't use Bitcoin as its USP, but it's actually a product that you would use regardless of Bitcoin. Products that compete with their centralised or fiat counterparts stand up against it on a better user experience and use case level.

In crypto at the moment, those building products are all focused on gimmicks; your product is always Bit something, a coin that, or you'd create a token of your own and name everything in and around that. This, to me, creates marketing myopia that pushes more people away from your product than towards your product.

In Bitcoin, layer 3, it's about the products use; examples of this are:

What makes layer 3 so amazing is that it leverages all the hard work done on layer 1 and 2 and brings it to the consumer in a fund, easy and userfriendly way. In layer 3, Bitcoin doesn't become the product. It only improves the already great product, and I think this is where the tech scene will move to the future.

A lot of money is focused on mining, building software, nodes, wallets, DE-Fi products, but eventually, when all the foundational stuff is done, it's about building roads for the user.

Layer 3 interoperability is exciting

When I think of the possibilities of layer 3 and the network effects it can bring, it's absolutely amazing. Imagine chatting on Sphinx and getting a few sats for your chat; imagine playing games and dropping a few sats in your wallet.

Then you can turn around and use Strike to pay for an uber tried with those same sats while only paying per kilometre you use as you stream sats to the driver.

Imagine paying to watch a movie or series as pay per view; you're only paying for the watch time and nothing more—no subscriptions coming off your account, no more wasting money you only pay when you use something.

Imagine sending your friend money and using Zap, and you're using WOS, and you still get instant clearance. Imagine doing a freelance job, getting sats and then immediately using that to pay for your coffee or WiFi you're using as you move to a new place to work as a nomad.

In a layer 3 world, all businesses, apps and service providers can exchange the value safely, trustless and instant means and eliminate the need for all the complexity we see in both legacy finance and the greater crypto market.

Have your say

What do you good people of HIVE think?

So have at it, my Jessies! If you don't have something to comment, "I am a Jessie."

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Sounds like the bitcoin network getting stronger and stronger. Reminds me of web 2.0 and then 3.0. so much more progress for bitcoin to come.

In the quite yes, it's not making many headlines, so people don't take note of it, which is fine by me, it will attract attention when its fully ready, not like so many crypto projects that want to do marketing with a half-arsed product

It is amazing...
The faucets wi come under which category?

Yes i would say faucets are a layer 3 tool, especially the ones that use multi chains or lightning as well as main chain

That would be a pretty awesome future!

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One I would like to be a part of and support by holding Bitcoin; as the price rises, more development comes in, more projects, more tools. So it's not only protecting your investment but growing and encouraging investment in time and skill into BTC too!

That's a great way to look at it.

wow, I don't really know that here are already 3 layers on bitcoin blockchain. I read about the lightning network, but has not really understand it.
i wonder how the world will be in layer 3 bitcoin. that will be so much easy and simple payment trasfer.

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I hope so, my view of layer 3 is it should be like any other application, people shouldn't even know or care that they are using the Bitcoin network, it should just work.

I'm liking the sounds of layer 3 already. Although I thought layer two was looking into instant sat movements, if you add ways to earn sats on top of that then this could change the game completely (no pun intended).

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Yes, layer 2 is meant for moving value around faster and in an instant but layer 3 it uses layer 2 for interoperability. So if you're using a lightning app, it's now automatically able to move value to any other app leveraging lightning. So you could earn as a freelancer and then buy in-game items. The apps themselves don't need infrastructure making them lighter and easier to use

The way I see it eliminates regional issues too, so you may use your local chat app, and I use my app but we can still send sats to each other. The apps themselves are just a touch point to the network