What is Stacks

Stacks is a cryptocurrency project established in 2013, originally named Blockstack, with the primary goal of enhancing the Bitcoin blockchain. Co-founded by Ryan Shea and Muneeb Ali, the platform focuses on decentralizing applications (DApps) and smart contracts on the Bitcoin network. The renaming to Stacks in 2020 reflects its commitment to providing modular and highly adaptable DApps within its ecosystem.

How Does Stacks Work?

Proof of Transfer (PoX) Mechanism

Stacks employs a unique consensus mechanism known as Proof of Transfer (PoX). Unlike traditional mining, Stacks miners don’t mine new tokens but exchange previously mined Bitcoin for the opportunity to earn STX tokens. This process, governed by PoX, secures the Stacks blockchain and verifies user identity and transactional metadata with each mined block.

Clarity Smart Contracts

Clarity, the smart contract language of Stacks, plays a crucial role in ensuring security and predictability. Unlike other languages, Clarity is decidable, allowing human-readable and auditable code. It facilitates the creation of various applications, including app-specific blockchains, tokens, access control, and business-model templates.

Stacks’ Role in Bitcoin

Positioned as a layer 2 (L2) solution for Bitcoin, Stacks functions as a Bitcoin layer that shares components with both Layer 1 and Layer 2 blockchains. Its architecture ensures that Bitcoin’s features remain untouched while facilitating the development of decentralized applications. Stacks is recognized as a Bitcoin L2 blockchain, directly anchored to Bitcoin, ensuring the security of its ecosystem.

Key Features

  1. Modular DApps: Stacks introduces highly modular DApps, enabling developers to build on any app created within the Stacks network. The modular nature allows for seamless integration and innovation.
  2. Bitcoin Integration: Stacks utilizes Bitcoin as its base layer, with all aspects of the Stacks ecosystem secured directly by the Bitcoin network. This ensures the immutability and stability of Stacks’ features.
  3. History: Originally named Blockstack, the project was initiated in response to concerns about internet centralization. The native token, STX, serves as the backbone for transactions and smart contract execution.

Stacks Features and Use Cases

  1. Mining: Miners spend Bitcoin in the mining process, and the verifiable random function (VRF) selects leaders for each round, writing blocks on Stacks. Miners receive STX tokens, Clarity contract execution fees, and transaction fees as rewards.
  2. Build Apps: Developers leverage Stacks to create decentralized applications, including games, exchanges, and non-fungible tokens (NFTs). Stacks offers functions like data storage, authentication, and transaction signing for app development.
  3. Gaia Storage System: Stacks utilizes Gaia, a storage system, for data not directly stored on the blockchain. It employs cloud storage providers like Microsoft Azure and Dropbox, offering users various storage options.
  4. Stacking: Stacking involves STX holders earning rewards for participating in the PoX consensus. Holders can commit a specific amount of STX for a cycle, with rewards distributed weekly.
  5. Gamma NFT Marketplace: Gamma serves as Stacks’ NFT marketplace, supporting all Bitcoin NFT projects. Users can explore, mint, purchase, and sell digital collectibles.