Despite holding over $1.7T in value, Bitcoin scales poorly: Layer-1 (L1) processes only a few transactions per second, and Layer-2 (L2) solutions suffer from operational and liquidity fragmentation that requires external bridges for cross-chain connectivity. We present Bitcoin-IPC, a protocol that horizontally scales Bitcoin via permissionless, interconnected, programmable Proof-of-Stake L2 subnets staked in L1 BTC. Subnets leverage Bitcoin L1 for interconnectivity, settlement, and security, including Sybil protection, equivocating validator slashing, unilateral exit for honest stake, long-range attack protection, and compromised subnet firewalling. Bitcoin-IPC cross-subnet transfers involve only source/destination subnet validators and L1, with no external bridges or per-path liquidity lock-up. Embedded and batched in Bitcoin's witness mechanism, cross-subnet settlements can approach 6 vB per transfer, 23x less than a native L1 payment. Filling Bitcoin blocks with such batches corresponds to L1 monetary throughput of about 273 transfers per second, without modifying Bitcoin.

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