Earning BTC with a new internet: Stacks
What is Stacks?
Hiro PBC was founded by Muneeb Ali and Ryan Shea. After graduating from Princeton University with an MA and PhD in computer science, Muneeb Ali co-founded Stacks in 2013, and still works with the platform today as the CEO of Hiro Systems PBC [1]. Stacks is an open-source network dealing with decentralized smart apps and contracts built on Bitcoin. These apps run their serviceability with smart contracts controlled by codes instead of corporate firms. Therefore Stacks ecosystem uses Bitcoin’s fully decentralized potential to achieve smart contracts and apps that bring security and stability to Bitcoin blockchain layers.
Why Bitcoin?
Bitcoin is the earliest and most secure blockchain; it provides a new type of money that cannot be controlled or altered by any single alt party [2]. The Bitcoin network provides the foundations for not just the Bitcoin cryptocurrency but a general protocol [3]. That makes it such a unique blockchain system.
Stacks Ecosystem
The Stacks ecosystem is a collection of independent entities, developers, and community members working to build a user-owned internet on Bitcoin. Stacks ecosystem allowing you to bring apps, smart contracts and digital assets that are compatible with Bitcoin’s network. Like Bitcoin, Stacks is a decentralized network. No company or person controls it. People from all around the world can contribute to Stacks [4].
Introducing new features to the Bitcoin core protocol is hard and not desirable as these features add complexity. Stacks solves this with Proof of Transfer, micro blocks, and Clarity. It is designed so that builders can benefit from Bitcoin’s properties without modifying Bitcoin itself [3]. Proof of Transfer is a mining mechanism that provides a new take on consensus, allowing for a Proof of Work chain (in this case, Bitcoin) to be leveraged and extended in important new ways. All Stacks transactions settle on Bitcoin, and this enables Stacks transactions to benefit from Bitcoin’s security [3].
Stacks Token (STX)
Stacks Token (STX) is the native asset on the Stacks blockchain and is used as fuel for transactions. All transactions, from executing Clarity contracts to creating digital assets, are paid for in STX. Stacks can be locked by STX holders to participate in consensus and earn Bitcoin rewards. This process is called Stacking. To participate, STX holders run a full node, lock their STX, and publish useful information periodically on the network. The annual earning rate of Bitcoin rewards depends on several factors. 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 [3].
Stacks cryptocurrency was distributed to the general public through the first-ever SEC-qualified token offering in US history with 4,500 people/entities participating. The long-term value of Stacks is generally dependent on the growth of the Stacks network and demand for Clarity smart contracts [3].
STX is available to trade on several prominent exchange platforms, including Binance, Kucoin, OKCoin, OKEx, Gate.io, Upbit. STX has a maximum supply of 1.818.000.000. According to Coinmarketcap, it’s price is 1.27$ [1].
Earning Bitcoin with Stacking
Earning Bitcoin with Stacks is an extremely easy process due to the 2.0 Mainnet Launch. STX token holders can also stack their tokens to earn Bitcoin as a reward. Stacking is an innovative mechanism that rewards STX token holders for participating in the consensus process. STX holders who participate in Stacking are called Stackers. STX holders can use pooling services and delegation to service providers is supported by the network [3].
The requirements for Stacking are simple: users need to hold a dynamic minimum amount of STX, which they can pool to meet, and ‘lock’ them on the network for the reward cycle, which is approximately two weeks. By locking STX and sending periodic transactions, these users support blockchain consensus and further secure the network. The BTC rewards made available in each cycle come from the BTC that STX Miners forward to the network in hopes of earning the right to mine a new block. Together, Stacking and STX Mining make Proof of Transfer (PoX) a more secure alternative to Proof of Stake by extending and building upon Bitcoin’s proof of work [3].
The special point of STX stacking is that stackers earn BTC instead of the token itself. You can stack with Hiro wallet by the minimum amount of 80.000 STX. Staked.us and Okcoin have the minimum amount of 10.000 STX and 50 STX respectively for stacking. You can stack with Xverse wallet also by the minimum amount of 500 STX. More detailed information about stacking cycles, BTC reward ratios can be seen on stacking.club address.
References
[1] Stacks (STX) Cryptocurrency Profile, https://coinmarketcap.com /tr/currencies/stacks/
[2] S. Nakamoto. “Bitcoin: A Peer-to-Peer Electronic Cash System”, October 2008. https://bitcoin.org/bitcoin.pdf
[3] M. Ali, Stacks 2.0: Apps and Smart Contracts for Bitcoin, Whitepaper Draft v0.1, December 2020.
[4] https://www.stacks.co/what-is-stacks
[5] Stacks bring apps and smart contracts to Bitcoin, Stacks Brief, https://paper.dropbox.com/published/stacksblue-Stacks-Brief-JOEqkfUQsrhINkQyCyBc5cK
