Eric Lombrozo runs Ciphrex and has long contributed to Bitcoin Core development. He outlined a vision for Bitcoin's future at the recent Blockchain Agenda Conference in San Diego, focusing on how the
Eric Lombrozo runs Ciphrex and has long contributed to Bitcoin Core development. He outlined a vision for Bitcoin's future at the recent Blockchain Agenda Conference in San Diego, focusing on how the network could handle more transactions. His framework drew from how the Internet itself is structured, broken into distinct layers that each serve a specific function.
Lombrozo explained his layered model this way: "We need to have a layered, heterogeneous architecture. For instance, with the Internet you have at the base level [things like] IPv4 and IPv6, then on top of that you have a transport layer (TCP, UDP), on top of that you have an application protocol layer, and then on top of that you have your actual applications."
Some members of the Bitcoin community support building new layers on top of the core protocol, while others insist most transactions must occur directly on the blockchain. Lombrozo himself has suggested the Bitcoin network could function as a settlement layer, with other systems handling everyday transactions.
The Base Layer: Cryptographic Proof, Not Networking
Bitcoin's foundation doesn't rely on network protocols the way most systems do. Lombrozo described it as a mathematical layer: "For Bitcoin, at the bottom level we have this consensus layer. The consensus layer is actually not a network protocol at all. It's actually a set of cryptographic commitment structures, which allow you to construct proofs that things happened according to certain rules. This is something that allows everyone to eventually come to agreement on what the state of the network is."
Bitcoin's decentralization comes from this cryptographic foundation. The blockchain makes transactions permanent roughly every ten minutes. No one can reverse a transaction or spend coins they don't own because the system relies on cryptographic signatures that cannot be forged.
The P2P Layer
Above the consensus layer sits the peer-to-peer network that lets all participants stay synchronized. Lombrozo explained: "Then above that, you have this peer-to-peer propagation relay network that allows nodes to synchronize with one another, download the blockchain in the first place, and propagate transactions."
These first two layers of the stack are complete. Current Bitcoin companies and applications operate within these layers.
Off-Chain Transactions
The third layer is still under development. Off-chain protocols would let developers create "higher level applications" without using the blockchain for every transaction. Open Transactions and the Lightning Network represent early work in this space. Both systems could move Bitcoin transfers to instant or near-instant settlement at minimal cost.
Off-chain transactions require some level of trust in intermediaries, while on-chain settlement does not. Well-known Bitcoin companies like ChangeTip will move to this layer as it matures. The fourth layer consists of the wallets and applications users interact with directly.
