Blockchain uses an innovative consensus mechanism. There are two types of participants in the system: miners and stackers. Miners invest BTCs for the opportunity to add blocks and earn rewards in the project's native token, which is used to secure the network and earn the bitcoins provided by the miners.
With the identification system, users can use the same data for all applications in the system. The identification system also allows access to data that is stored outside the blockchain.
The storage system, based on multiple cloud infrastructure providers, allows you to store all data created by users, except for their identifiers and transaction metadata. Users are in complete control of their data in the applications they interact with. At the same time, the data storage system does not encrypt user data by default, leaving it at their discretion. The user can open his own cloud and store data in it.
The blockchain mirrors the BTC blockchain: with each new block added to the Bitcoin network, a new block appears on the Stacks network, about once every 10 minutes. The blockchain is only used to record user IDs and the metadata of their transactions.
New Programming Language
The blockchain uses Clarity, a new programming language focused on smart contracts. Thanks to its unambiguous syntax, it is simple and safe.
Taking the Best from BTC
The blockchain takes full advantage of BTC by connecting to the latter’s blockchain through the Proof-of-Transfer consensus mechanism. Miners pay with BTC for issuing new STX tokens. Holders of these tokens can stack them, receiving BTCs as a reward. The rewards can be used for consensus participation, funding ecosystem developers, and incentivizing network members.
Benefits for Developers
From a developer's point of view, Blockstack is an open and convenient network for creating decentralized applications and smart contracts, united within a decentralized network supported by developers from all over the world. More than 500 teams are already working on the blockchain.
User Privacy and Property Rights Protection
Blockchain implements the protection of user privacy and property rights. With decentralized data storage and accounts, everything that users create in the application belongs to them. Users independently manage their data and personal data using secret keys.
In 2013, two crypto enthusiasts founded the non-profit organization Blockstack PBC in New York. Involved in the development of the Blockstack project, it subsequently released the Stacks platform.
Developers sought to create a protocol for a decentralized parallel Internet, functioning independently of the main one Instead of storing all the necessary information on the servers of different applications (for example, using Google to store emails, and WhatsApp for messages), they suggested storing data locally, that is, on the user’s device.
This way, applications will only be able to access the data they need to function. Such applications cannot store or modify user data or transfer it to third parties. This idea was implemented in the blockchain platform designed to run smart contracts and decentralized applications.
In November 2014, the Blockstack team held a seed funding round, during which they managed to raise $1.3 million in investments.
The team started developing the Stacks 1.0 blockchain platform. In November 2017, Blockstack held the first STX token sale (ICO), which raised $47.5 million from 800 accredited investors. However, the project's ICO was designed in such a way that 80% of the funding was blocked until the project reached certain development milestones. The first step was the launch of the Stacks 1.0 main network and crypto wallet in October 2018 – the team gained access to $25 million. And only in January 2020, an independent commission confirmed the achievement of the second key milestone – a millionth user registered in the Stacks 1.0 network. This allowed the team to receive another $6.8 million in investment.
However, it was in September 2019 that Blockstack entered the history of the crypto market. Then the project team for the first time conducted an initial offering of STX coins, which received approval from the US Securities and Exchange Commission (SEC) in accordance with the “A +” provision. As part of the ICO, the company sold STX as securities for $23 million.In total, 4,500 individuals and legal entities took part in it – both accredited and retail investors.
The launch of the Stacks 2.0 mainnet took place in 2021. The STX coin ceased to be a security, as control over the assets completely passed to the holders, Thus, the company has achieved a high degree of decentralization of Stacks 2.0. Moreover, with its launch, STX has become a utility asset as coin holders can use it inside Stacks 2.0.
Although Stacks is a separate open source network, it is built on top of the BTC blockchain. It turns out that BTC is a safe and reliable foundation, and Stacks is a first-level solution where smart contracts and dApps are available to users.
The developers chose the oldest cryptocurrency network for several reasons. First of all, because BTC is the first blockchain network. Its effectiveness and reliability are recognized far beyond the crypto community. In addition, the security level of BTC can hardly be compared with any other network. Not the last role played the fame of the world's first cryptocurrency. The world community focuses on BTC and takes it as a kind of crypto standard. The creators of Stacks, on the other hand, open up new opportunities for BTC holders: for example, use NFT or create DeFi protocols.
However, unlike BTC, Stacks uses a new consensus algorithm – Proof-of-Transfer. It is a combination of Proof-of-Work, Proof-of-Stake, and Proof-of-Burn algorithms. This approach allows achieving a high level of decentralization and scalability, but without such critical environmental consequences as in the case of classical PoW.
In fact, Proof-of-Transfer is based on PoB, a consensus algorithm in which miners burn (that is, destroy) part of the network’s cryptocurrencies in exchange for the right to generate a new block and receive a reward for it. The more coins the miner burns, the higher his chances of getting a reward.
But unlike PoB, you don’t have to burn coins – instead, miners send their coins to special addresses. For this, they receive network coins The peculiarity of Proof-of-Transfer in Stacks is that BTC plays a key role in the mining of new coins – in order for miners to be able to mine new STX, they need to send their BTCs.
Stacking is what they call the alternative to staking on the Stacks platform. Staking allows you to create new cryptocurrencies by storing them in a wallet or a special smart contract. The conditions may differ depending on the blockchain, but in general, the essence of staking is the same: the user stores the coins and thereby ensures the performance of the network, which operates on the PoS consensus algorithm. For this, he receives a reward in the form of new coins of the network.
The so-called stacking in Stacks is in many ways similar to the usual staking, but with certain features. This mechanism also ensures the correct blockchain operation, but users are rewarded not in the native STX tokens, but in BTCs that miners send to special addresses as part of Proof-of-Transfer.
There are several ways to store STX and earn BTCs: on the crypto exchange via a non-custodial pool, or within the Stacks ecosystem. The choice depends on the user's experience and the number of his STXs.
So, developers advise newcomers to use crypto exchanges. Such services store the user's cryptocurrencies and place them in a special pool. Another option for beginners or those who do not want to complicate their lives is non-custodial pools: for example, Xverse Pool or Planbetter. These pools, like crypto exchanges, pool users' STX coins and pay out rewards in proportion to the deposit amount.
If the user has enough coins he can stake without the help of third-party services. In this case, staking will be available, for example, using the Hiro Desktop Wallet.
The goal of Stacks is to create a new decentralized Internet of the future based on Bitcoin, in which the user does not have to worry about the safety of data and his safety on the network. Although this goal sounds extremely ambitious now, the growing popularity of the project and its technologies suggests that the solutions offered by the Stacks platform are in demand.
Over the eight years of its existence, the Blockstack project has grown from a promising startup into one of the most sought-after decentralized computing networks and an entire ecosystem for creating decentralized applications (dApps).