  We argue that the current POW based consensus algorithm of the Bitcoin
network suffers from a fundamental economic discrepancy between the real world
transaction (txn) costs incurred by miners and the wealth that is being
transacted. Put simply, whether one transacts 1 satoshi or 1 bitcoin, the same
amount of electricity is needed when including this txn into a block. The
notorious Bitcoin blockchain problems such as its high energy usage per txn or
its scalability issues are, either partially or fully, mere consequences of
this fundamental economic inconsistency. We propose making the computational
cost of securing the txns proportional to the wealth being transferred, at
least temporarily.
  First, we present a simple incentive based model of Bitcoin's security. Then,
guided by this model, we augment each txn by two parameters, one controlling
the time spent securing this txn and the second determining the fraction of the
network used to accomplish this. The current Bitcoin txns are naturally
embedded into this parametrized space. Then we introduce a sequence of
hierarchical block structures (HBSs) containing these parametrized txns. The
first of those HBSs exploits only a single degree of freedom of the extended
txn, namely the time investment, but it allows already for txns with a variable
level of trust together with aligned network fees and energy usage. In
principle, the last HBS should scale to tens of thousands timely txns per
second while preserving what the previous HBSs achieved.
  We also propose a simple homotopy based transition mechanism which enables us
to relatively safely and continuously introduce new HBSs into the existing
blockchain.
  Our approach is constructive and as rigorous as possible and we attempt to
analyze all aspects of these developments, al least at a conceptual level. The
process is supported by evaluation on recent transaction data.
