Bitcoin Network Layers

TL;DR

Bitcoin is evolving from a simple monolithic ledger into a layered network stack, similar to the Internet model (IP → TCP → HTTP).

The Layered Stack

To scale globally without sacrificing decentralization at the base layer, the Bitcoin ecosystem is developing a modular, layered architecture:

Base Layer (L1): The Timechain. Acts as the immutable, global, final settlement system. Everything ultimately anchors back to this foundation.
Lighting Network & Arks (L2): Scalable transaction layers. Provide iterative, instant, and nearly free payments using L1 as a court of final settlement.
RGB and Taproot Assets: Client-side validation protocols. They operate over Bitcoin transactions, allowing the representation of real-world assets (like stablecoins or digital gold) without inflating the main chain with non-monetary data.
Nostr (Communication/Identity): A decentralized relay network. While not strictly a financial layer, it acts alongside Bitcoin to help build trust graphs, manage identity, and route metadata independent of financial nodes (e.g., Zaps linking communication and micro-payments).