ӿ Stacks brings apps and smart contracts to Bitcoin
Note: We’re in the process of focusing the brand on‘Stacks’, but you will see historically the project is referred to as Blockstack and it appears in many of the resources and articles linked as such. We very much appreciate you being sure to refer to the project and asset as‘Stacks’, only using Blockstack in a historical context.
Basics
The Stacks ecosystem is a collection of independent entities, developers, and community members working to build a user-owned internet on Bitcoin. The internet as we know it is broken. We’re working to build a better one and believe it will rise on blockchains, specifically Bitcoin. Stacks gives developers the tools to innovate and build value for users upon Bitcoin, the most secure and proven blockchain in the world, in ways previously not possible.
Project History
Muneeb Ali and Ryan Shea founded what would eventually become the Stacks project in 2013 at the Princeton computer science department to solve the underlying problems of current web and mobile apps. Muneeb’s Ph.D. thesis was on Blockstack. The two led their new startup through the Y Combinator accelerator in the summer of 2014, and upon completion, raised a seed round led by Union Square Ventures(USV), with participation from Naval Ravikant, SV Angel, and others.
After launching a blockchain-based decentralized identity(DID) system in 2014, the team released the initial design for the Blockstack platform in 2015. They began R&D on its peer-to-peer communication and data storage system. The R&D phase lasted through 2017 and concluded with Blockstack releasing an alpha version of its developer platform, which included a developer release of the Blockstack Browser and a decentralized storage system.
By the end of 2017, the company also secured two additional funding rounds via a Series A, led by USV, with participation from Lux Capital, Digital Currency Group, and others. In July 2019, Blockstack received the green light from the SEC to conduct a token sale in the U.S under Regulation A+, the first such token offering of its kind. Blockstack PBC has now raised over $75 million from equity investments and token offerings for the Stacks ecosystem. Investors also include USV, Lux Capital, Zhen Fund, HashKey, Recruit Holding, SNZ, Digital Currency Group, Y Combinator, Foundation Capital, Winklevoss Capital, and over 300,000 other entities and individuals.
The Stacks ecosystem is approaching an incredible milestone - a mainnet launch expected on January 14, 2021. Stacks 2.0 promises to bring secure apps and smart contracts to Bitcoin, unlocking a new wave of innovation upon the world's most robust blockchain.
The launch will be just the beginning of an exciting new era for the Stacks community and for crypto broadly as developers begin to leverage Stacks to build a user-owned internet on Bitcoin.
Stacks 2.0 Mainnet
Stacks 2.0 brings apps and smart contracts to Bitcoin. Our thesis is that successful experiments from various blockchains will eventually get created on Bitcoin. The network effects of Bitcoin mean that smart contracts around Bitcoin have access to more crypto capital and benefit from higher security. We believe that Bitcoin can be the foundation for a better user-owned internet much like TCP/IP for the traditional internet.
Proof of Transfer(PoX is the first consensus algorithm between two blockchains. Specifically we present an implementation of PoX by using Bitcoin as the base chain and Stacks as the connected chain. In PoX, leader election happens on the Bitcoin blockchain. Instead of burning electricity on proof of work, PoX reuses already minted bitcoins as“proof of computation” and miners represent their cost of mining in bitcoins directly.
There are two types of participants as part of the PoX consensus mechanism: (a) STX miners, and(b) STX holders.
⛏️ STX Mining
STX miners can view state on both the Bitcoin blockchain and the Stacks blockchain. STX miners participate in leader election by sending transactions on the Bitcoin blockchain, a Verifiable Random Function(VRF randomly selects leader of each round(while giving more weight to higher BTC bids), and the leader writes the new block on the Stacks chain. STX miners get newly minted STX(coinbase rewards), transaction fees paid to them in STX, and Clarity contract execution fees of each block also paid in STX. STX miners express the cost of mining in BTC and spend BTC to participate in leader election. The STX miners can model the total value of a new Stacks block as a BTX/STX on-chain trading pair, and will participate in mining if they can get cheaper STX from mining than from outside exchanges.
🪙 Stacking
STX holders can participate in consensus and earn BTC rewards by participating in a process called Stacking. To participate, users lock their STX for a reward cycle(approx two weeks), run or support a full node, and send useful information on the network as STX transactions. STX holders who actively participate in Stacking earn the Bitcoin rewards of that cycle. Unlike proof of stake, there is no risk of slashing(economic penalties by protocol) for STX holders.
⛓️ Clarity Smart Contracts
Clarity is a new programming language for smart contracts. The Clarity language optimizes for predictability and security. Stacks 2.0 anchors clarity smart contracts to Bitcoin making it possible for smart contracts to operate based on actions seen on the bitcoin blockchain.
Tokenomics
The Stacks cryptocurrency has 1.32 billion(1,320M STX in the genesis block. These STX were distributed through various offering in 2017 and 2019. The 2017 offering distributed STX at a $0.12 price, the 2019 Reg S offering at $0.25, and the 2019 SEC qualified offering at $0.30. Figure 1 below gives the breakdown of the genesis block tokens.
The Stacks cryptocurrency has a predefined future supply that reaches approx 1,818M STX by year 2050(a reduction from the earlier 2,040M STX. By end-Jan 2021, approx 1,006M of the 1,320M genesis block STX will be liquid and the remaining will unlock monthly following various locks. For example, STX allocated for founders and employees follow a 3 year unlocking and a subset of these will unlock between Jan 2021 and Nov 2021. Figure 2 shows the increase in total circulating supply of Stacks until 2050.
After the release of Stacks 2.0 certain improvements like auctions for block space, more throughput and speed of microblocks, and advanced Clarity language features can be areas for future work that the Stacks Foundation and the broader community may work on.
Interesting Facts
In Fall 2020, Blockstack PBC released a legal memo summary that details the transition to a non-security status for the Stacks(STX cryptocurrency in the US
ӿ Stacks brings apps and smart contracts to Bitcoin
Basics
Project History
Stacks 2.0 Mainnet
Proof of Transfer
⛏️ STX Mining
🪙 Stacking
⛓️ Clarity Smart Contracts
Tokenomics
Interesting Facts