Stacks STX Crypto

An introduction to Stacks

Stacks makes Bitcoin programmable by enabling smart contracts. You can see Stacks as a blockchain 1.5, where it is its own protocol but is directly linked to the Bitcoin network.

By: PascalKeizer


Bitcoin was created In order to provide individuals with a currency that cannot be inflated or manipulated. A type of money that can be directly owned and used for transactions without the use of middlemen like businesses or banks. At all this, Bitcoin’s protocol and decentralized network has been doing a near-perfect job.

However, when it comes to building apps on top of it, the Bitcoin protocol isn't that versatile. It has become abundantly evident in recent years that there are numerous additional applications for blockchain technology, including DeFi and NFTs. Bitcoin has not yet been able to be used for this.

This is where Stacks takes the stage.

If you want to learn how to use the Stacks ecosystem, click here


Stacks & Bitcoin

Stacks makes Bitcoin programmable by enabling smart contracts. Stacks can be thought of as a blockchain 1.5 that has a direct connection to the Bitcoin network yet has its own protocol. Stacks makes use of the Bitcoin network's security to protect its own. Stacks has made it feasible for blockchain to be used in exciting new ways on the Bitcoin network.

For instance, owners of bitcoins can lend them out to earn interest, use them as security for a stablecoin loan, or use Stacks to purchase some Bitcoin culture in the form of NFTs, all without using centralized exchanges, middlemen, or businesses like Celcius or Nexo but instead straight from their wallet.

Stacks enables smart contracts on Bitcoin

By enabling this and numerous other use cases, Stacks gives the Bitcoin financial network a vital layer for widespread adoption. Stacks is working to create a new internet with Bitcoin as its base layer, one that is secured by the Bitcoin network and safeguards personal information and property rights.

Although not the only project attempting to do this, Stacks is unquestionably the market leader. With numerous DeFi projects and hundreds of NFTs projects active, the Stacks ecosystem is only getting started. Interest in and usage of the ecosystem are growing.


The history of Stacks

In 2013, Stacks started as a computer science PhD project at the university of Princeton under the name Blockstack. The project was turned into a startup and was then incubated by Y-Combinator a year later.

The project has so far received $76 million in funding. Naval Ravikant, Anthony Pompliano, Meltem Demirrors, Winklevoss Capital, and the Digital Currency Group are just a few of the well-known investors in Stacks.

It is noteworthy that Stacks was the first project to be qualified by the SEC for a token sale in the US. Even if this does not imply that the token is entirely regulated, it does significantly improve STX's legal standing relative to other tokens..



Team & organization

The PhD origins of Stacks was started by Muneeb Ali and Ryan Shea. The team grew progressively as the idea evolved from a research paper into a startup and then into an ecosystem, with an amazing pool of computer science talent from colleges like MIT, Harvard, and Stanford.

The extensive talent of the Stacks Team

The organization in charge of creating and updating the Stacks protocol is called Hiro PBC. The Stacks Accelerator also aids in the launch of initiatives on Stacks.


Technology

Stacks is the first protocol that has linked to separate blockchains. The protocol's initial iteration, which was launched in 2018, served as a proving ground. But after the release of Stacks 2.0 in mid-January 2021, programmers began creating smart contracts on Bitcoin. Now, Stacks has the first consensus mechanism between two blockchains.


Proof of Transfer

Through its distinctive Proof of Transfer (POX) consensus system, Stacks is a blockchain that is directly connected to the Bitcoin blockchain. Because every Stacks transaction is resolved on the Bitcoin blockchain, it benefits from the security provided by the network's widespread Proof of Work and is therefore just as secure as a Bitcoin transaction. To get to the Proof of Transfer whitepaper, click here.

Stacks Proof of Transfer Consensus Mechanism

In Proof of Transfer, miners do not mine Stacks with machinery or electricity. Instead, to create fresh STX tokens and generate transaction fees, miners use Bitcoin. Through this mechanism, STX stakers receive Bitcoin and STX miners receive STX.


Microblocks

The 10 minute block time of Bitcoin is inexorably applied to the Stacks blockchain because it is tethered to Bitcoin's blockchain. With microblocks, the Stacks protocol is resolving this. Numerous transactions can be carried out in between Bitcoin blocks thanks to these microblocks. The transactions included in these microblocks will be submitted to the Bitcoin network in their final form. For more information about microblocks, click here .


Clarity

Smart contracts on Stacks are written using the Clarity programming language. This language is developed by the team itself. WClarity optimizes for security through a concept known as predictable code, despite not being as free as other languages (it is not Turing complete). Developers can precisely predict what a program will accomplish, how much data it will require, and how much it will cost to operate a program thanks to predictable code. For complete Clarity information, go here.

Visit this page to find out more about the Stacks blockchain's technological foundation.


Congestion

Congestion issues for transactions have been brought on by the swift growth of an ecosystem on top of Stacks. A transaction could take hours to complete at busy times. In order to increase transaction speeds, an upgrade proposal known as SIP-012 was put forth and supported by the STX community.

The launch of this Stacks Improvement Proposal, which will upgrade Stacks to version 2.05, is planned for late November. A 66.7% approval rate was necessary, which eloquently illustrated the strength of decentralized governance and the STX token's usefulness.

Click here to learn more about how Stacks can scale.


Stacks token ($STX)

The native token for the Stacks blockchain is called STX. Through the Proof of Transfer consensus algorithm of Stacks, this token is used to safeguard the blockchain. The STX token has one of the most intriguing earning systems in the market as a result of this scheme. Staking STX entitles you to Bitcoin rewards.

Additionally, STX is used to vote on protocol enhancement suggestions and to pay for transactions on the Stacks network.

1.32 billion STX were produced when the initial iteration of the protocol went live in November 2018. You can see here exactly how these tokens were distributed. The STX has an infinite supply and is inflationary.

Currently, miners receive 1000 STX per block. However, this reward will drop by 50% every four years until it reaches 125 STX per block, where it will stay indefinitely.

Additionally, the STX token was the first cryptocurrency that received clearance from the SEC for a sale in the US.


Ecosystem

The Stacks 2.0 blockchain has been live since mid-January 2021. An ecosystem of dapps has been gradually becoming live on the blockchain since the summer of 2021.

Overview of the Stacks Ecosystem

Two major NFT marketplaces — STXNFT and StacksArt — comprise a few dozen NFT projects and a few DeFi projects, however the latter are still in the very early stages of development and are in beta. Nevertheless, there is a ton of work being done, and hundreds of projects have plans to go live on Stacks.

Click here to find out how to use the Stacks ecosystem.



Flagship’s perspective

In recent years, it has become abundantly evident that Bitcoin serves as the internet's and the crypto market's de facto reserve currency and has the ability to do so globally. Even while there are already a lot of ways to spend your bitcoin, almost all of them require a reliable third party, which completely contradicts the point of how Bitcoin was intended to work.

With the help of the world-class security provided by the Bitcoin network, the Stacks ecosystem is beginning to open up a wide range of use cases for the cryptocurrency without letting investors lose control over their funds. When it comes to Ethereum, DeFi has grown significantly over the past year and now makes up about 30% of the market capitalization. The ecosystem of Stacks might draw billions as soon as it becomes scalable and has a robust dapp ecosystem.

Even though there are other projects attempting to make Bitcoin programmable, Stacks continues to be a leader in the field. This is maybe not surprising considering the 8 years of effort, the brilliant staff, and the highly developed infrastructure for support and funding of future initiatives. We don't anticipate widespread adoption of Stacks any time soon because the ecosystem built on top of the Stacks chain is still developing, the protocol doesn't scale well, and there aren't any dapps that use native Bitcoin just yet.

However, a 10x scalability improvement is in the works, as is native Bitcoin and hundreds of projects are building on top of Stacks. The sky is the limit once these launch and the network gains significant traction.


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