Layers of the Internet, Layers of Bitcoin

Why We're Still Early

“Every technology that becomes a foundational layer of civilization starts out looking like a toy.” – Chris Dixon

When we think of the internet today, we imagine a seamless experience: video calls, instant messages, streaming, e-commerce, social media. But this smooth digital surface is built atop a stack of invisible layers—protocols and standards that took decades to develop, scale, and gain mass adoption. What most people don’t realize is that Bitcoin is on a similar path, quietly evolving through a layered architecture that mirrors the internet’s own historical progression.

Understanding this parallel is essential to grasp just how early we are in the development of the Bitcoin network—and how profound its impact may become.

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The Internet Stack: From Protocols to Platforms

The internet was not born as a single unified system. It was built in layers, each solving specific technical problems and enabling the next generation of applications.

Let’s simplify the core layers of the internet:

1. Physical Layer – The cables, fiber optics, satellites, and routers.

2. Data Link & Network Layers – Protocols like Ethernet and IP (Internet Protocol) that let machines find and talk to each other.

3. Transport Layer – TCP (Transmission Control Protocol) ensures that packets of data arrive intact and in order.

4. Application Layer – HTTP, FTP, SMTP, and DNS enable web browsing, file sharing, email, and domain lookups.

Each of these layers had to be created, standardized, tested, and scaled over decades. Tim Berners-Lee’s creation of the World Wide Web in 1989 was built atop TCP/IP, which itself dates back to the 1970s. It wasn’t until the late 1990s and early 2000s that applications like Google, Amazon, and Facebook really took off—30 years after the internet’s early research phase.

Today’s slick apps ride on a mature, invisible stack of protocols that nobody outside the tech industry even talks about anymore.

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The Bitcoin Stack: Sound Money at the Base

Bitcoin began in 2009 as a simple but profound innovation: a decentralized ledger secured by proof-of-work. Like the early internet protocols, Bitcoin’s base layer (Layer 1) prioritized resilience, security, and neutrality over speed and flexibility. That’s by design.

Here’s how the Bitcoin stack is emerging:

1. Layer 1: Bitcoin Base Chain – The foundational blockchain that records transactions approximately every 10 minutes. It’s secure, decentralized, and extremely difficult to change.

2. Layer 2: Lightning Network, Liquid, Fedimint, Ark, Rollups – These are second-layer protocols that settle on Bitcoin but allow for faster, cheaper, and more flexible transactions.

3. Layer 3: Applications and Services – Wallets, exchanges, payment services, peer-to-peer marketplaces, and increasingly sophisticated smart contract tools.

Just like TCP/IP isn’t used directly by most consumers, the average person may never need to interact with Bitcoin’s base chain. Instead, they’ll use apps built on higher layers—just as we all use email and web browsers without knowing how HTTP or DNS work.

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Comparing the Arcs of Innovation

Let’s draw a few comparisons between the development of the internet and Bitcoin:

In other words, we’re in the late dial-up phase of Bitcoin—early infrastructure is in place, but the best use cases and applications are still to come.

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Why This Matters: A Long-Term Perspective

The internet’s story offers critical perspective for Bitcoiners and skeptics alike. It reminds us that foundational technologies don’t emerge overnight—they must be built, tested, attacked, iterated upon, and scaled. Bitcoin is following that same trajectory.

Here are key takeaways:

• Base layer security comes first. Like TCP/IP, Bitcoin's base chain is not optimized for speed but for neutrality and resilience.

• Layer 2 and 3 are where usability blooms. Just as the web browser changed the game for the internet, Lightning wallets and user-friendly apps will change the game for Bitcoin.

• The most transformative use cases come later. E-commerce, search engines, and social media didn’t show up in year one. Bitcoin’s most impactful apps—like global remittance platforms, decentralized identity, or AI-powered microtransactions—may still lie ahead.

• Bitcoin is programmable money. Unlike gold or fiat, Bitcoin can support layers of computation and innovation that rival or exceed the flexibility of the internet itself.

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The Closing Argument: We're Still Early

If you're frustrated that Bitcoin isn’t already replacing the dollar or transforming society, remember: we’re still laying the cables, writing the protocols, and building the bridges.

Just as few could predict YouTube or Uber in the era of dial-up modems, few today can predict what Bitcoin will enable once its layered infrastructure matures. But if history is any guide, the journey from protocol to platform is long, exponential, and world-changing.

We're not late. We're just getting started.

Not financial or legal advice, for entertainment only, do your own homework. I hope you find this post useful as you chart your personal financial course and Build a Bitcoin Fortress in 2025.

Thanks for following my work. Always remember: freedom, health and positivity!

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