New Bitcoin Scaling Plan Targets Adoption by Millions of Users

A new proposal called Layertree has been unveiled by Bitcoin developer Olaoluwa Osuntokun, offering a way to condense millions of Bitcoin owners into a single blockchain output without taking away control of their funds. However, Bitcoin’s current rules cannot support the technology yet.

One Bitcoin Output Could Represent Millions of Individual Owners#

On Oct. 15, 2026, Lightning Labs developer Olaoluwa Osuntokun published a 103-page paper introducing Layertree, an ambitious attempt aimed at making Bitcoin significantly cheaper for large groups of users without handing over custody of their funds to an outside party.

Currently, individual holdings are recorded on Bitcoin through separate digital tokens known as unspent transaction outputs (UTXOs). Each token consumes space on the blockchain, and transferring those funds requires paying network fees. Layertree turns that standard setup upside down. Rather than assigning every user a distinct output, thousands or even millions of people could share a single one, while personal balances stay tracked through a off-chain mathematical ledger.

Consider a residential apartment building. Everyone shares one common roof, yet every resident retains their own private unit. Operations are managed by a property manager who holds no ownership over anyone’s personal belongings. That is effectively what Layertree proposes for Bitcoin. The setup relies on a Merkle-sum tree—a specialized mathematical record that tracks every balance while enabling Bitcoin to confirm ownership without having to store each account separately.

Your Bitcoin, Your Choice: Exit Anytime Without Permission#

Here is where the dynamic gets interesting. Even though the pooled framework is managed by an operator who approves incoming members, that administrator cannot simply confiscate anyone’s bitcoin or block a legitimate withdrawal. Any user wishing to exit can present a mathematical proof verifying their exact balance. A specialized Bitcoin rule, referred to as a covenant, validates the proof, unlocks their funds, and adjusts the remaining balances accordingly.

No operator approval is needed to execute a withdrawal, and no mandatory waiting period or expiration date applies to the pooled output. Osuntokun’s paper also attaches concrete figures to the concept. Within a network offering 65,536 open slots, withdrawing on an individual basis would consume roughly 1,020 virtual bytes (vB), the standard unit used by Bitcoin to compute transaction costs.

That spans about nine times the size of a standard Bitcoin transfer, yet remains far smaller than the roughly 2,511 vB required for a similar Ark-style exit. The genuine efficiency appears when users pool their efforts. Based on the paper’s projections, onboardings for a group of 1,000 members could be executed for under 1 vB per individual.

The Hidden Trade-Off in Bitcoin’s Shared Wallet Experiment#

Layertree comes with distinct drawbacks, some of which are quite significant. First, entry into the system is controlled by operators. While they cannot block a legitimate exit, they retain the power to reject new participants. Second, because every user relies on a single shared Bitcoin output, concurrent withdrawals must fight for the same limited block space. Should thousands attempt to exit at once, severe network congestion could easily result.

Participants also face a direct level of responsibility. Before depositing any funds, users must verify the mathematical data backing their balances, as failing to check this information could leave their bitcoin permanently locked. Crucially, Layertree cannot function under current network rules, as key capabilities—including new scripting commands—have not been activated yet on Bitcoin.

Osuntokun has created reference code, run script tests, and mathematically verified key parts of the structure. Even so, these milestones fail to prove that the entire setup is secure under real-world conditions. Layertree proposes a compelling trade-off for Bitcoin’s evolution: millions of users could dramatically cut blockchain expenses while maintaining full control over their assets. Yet the very pooled mechanism that makes this design affordable could turn into its main drawback if a mass exodus occurs.