7. The bitcoin standard as a scaling solution

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This paper expands on the concept of layered scaling as discussed in The Bitcoin Standard. The popularity of bitcoin as hard money is likely to far exceed its capacity for on-chain transactions, necessitating the development of second layer solutions. Custody and credit allocation are market services that have proven in demand through many monetary and financial system, and there is no reason to assume they will disappear in a bitcoin economy. The economics of second layers are discussed, with specific focus on the Lightning Network, and the factors shaping its growth and evolution. The risks of layered scaling are discussed. (9,514 words)