O, my dear Simmias, is there not one true coin, for which all things ought to exchange? -- and that is wisdom.. Socrates

 Article: Internet architecture layers principle: a conceptual framework for regulating / ENHANCING Bitcoin

Bitcoin is the first decentralized, peer-to-peer network that allows for the proof and transfer of ownership of virtual currencies without the need for a trusted third party, bypassing the role of traditional financial institutions. On the one hand, it provides the foundation for tremendous financial innovation. On the other hand, governments fear the coming of a world without regulable financial intermediaries. This research article addresses the policy dilemma of how we can capture Bitcoin’s potential benefits for the economy while addressing the challenges to law enforcement. As the internet and finance starts to shape each other, we have few conceptual anchors to model the collision of law and policy in the cyber arena with the modes of interactions in the Bitcoin ecosystem. Inspired by the alignment strategy developed by Choucri and Clark (2012) for cyberspace and international politics, this article seeks to develop an alignment strategy to explicate the Bitcoin ecosystem through well-established principles of internet architecture, drawing important insights on a regulatory approach for Bitcoin.

Bitcoin shares the same qualities of the internet which make the latter the most important platform for innovation and creativity in modern times. To appreciate the significance of Bitcoin, it helps to understand the layers architecture of the internet as proposed by Solum and Chung (2004). The internet is a neutral platform. Anyone can develop network applications with or on top of TCP/IP, the protocol that makes the internet possible as a network of networks. The abstraction of an upper 'application layer' is important because no permission is necessary for anyone to develop applications, and innovation is decentralised and placed in the hands of individual innovators. Therefore, the real value of Bitcoin lies not so much in its potential to become a substitute for money, but rather in its ability to act as the internet of money

Since every Bitcoin transaction is defined by code, money can be programmed to come with conditions. For instance, money will be released only if a third person agrees, or people will fund a project only when a threshold is passed. The technology behind Bitcoin allows continuous micropayments that are impossible with traditional payment systems due to the prohibitive transaction costs. This makes fine-grained usage-based pricing possible for the first time. Bitcoin can represent ownership of physical assets. For instance, a car can only be turned on with the Bitcoin token. It is impossible to predict what kind of applications will emerge, but one thing we can be certain about is that waves of financial innovation will happen on the Bitcoin platform.

In Solum and Chung (2004), cyberspace is thought of as a modularised, interconnected layered system consisting of six layers: the physical, link, internet protocol (IP), transport, application, and content layers. Choucri and Clark (2012) introduce a simplified “four-layered model that captures the essential features of interest”: the physical layer forms the internet’s physical foundations; the link, IP and transport layers encapsulate the logical functions of an application; information is stored and transmitted through programs in the application layer; users make decisions and carry out actions with information in the content layer.

CONTENT LAYER: The National Science Foundation NSF sponsored Next Generation Internet proposal now in prototype describes routing by content and was formerly known as Content Centric Networking CCN. Content <tags> should be routable by <type> and precedence following Network Centric Warfare's DEFCON / INFOCON five layer model to facilitate machine to machine Internet of Everything / Everywhere model where closer is of greater interest and closer is cheaper and faster combined with urgency of need criteria <flash>

LOGICAL LAYER: Early pioneers called miners use software programs that follow a mathematical formula to produce bitcoins. These technophiles, intrigued by the potential of cryptographic payments, laid the foundation for innovation where anyone can build on top of the Bitcoin protocol. Notably, the Bitcoin protocol contains the block chain, a transaction database shared by all nodes in the system. Based on the block chain, applications can be built on top and information flows can be reconstructed, as explained in the next section of the article.

IINFORMATION LAYER: Bitcoin exchanges offer services to non-miners to exchange between bitcoins and conventional currencies. Wallet and escrow services allow individuals to store bitcoins securely and conveniently. Payment processors provide integration services for merchants to accept bitcoins from consumers. Traditional financial institutions and incumbent payment systems may adopt Bitcoin technology to increase efficiency and remain competitive.

USER LAYER: Bitcoin has attracted a wide range of users, from traders and speculators taking advantage of Bitcoin’s price volatility, individuals sending remittances, to consumers making real payments. On the other hand, criminals are attracted by Bitcoin’s pseudonymity to engage in illegal activities such as money laundering, terrorism financing, drug dealing, online gambling.

Bitcoin is referred to as a next generation internet as is the Named-Data Network formerly known as Content Centric Networking.. Network Centric Warfare works by leveraging (workflow) content filtering via Unicast-Multicast as does Named_Data Networking. Bitcoin's value fluctuations are a barrier to adoption -- so, peg Bitcoin color coin types to commodities and process the coin / commodity / content type by precedence Network Centric Warfare style -- after all, it's all the same internet yes? Internet layers conceptual framework for regulating Bitcoin -- use NSF NDN, NCWarfare, TERRA TRC too