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What is Stacks STX?
They launched the first testnet for the blockchain, called the Stacks network, in the second quarter of 2018. If you would like to know where to buy Stacks at the current rate, the top cryptocurrency exchanges for trading in Stacks stock are https://cryptolisting.org/ currently Binance, Bitcoiva, OKX, 4E, and Bitget. Bitcoin is the largest, most valuable, and most durable decentralized asset. The Stacks layer unlocks $500B in BTC capital using the Bitcoin L1 as settlement for decentralized applications.
- PoX connects miners on the Bitcoin blockchain and stackers/stakers on the Stacks network.
- According to this, the sBTC has two modes; the Normal mode and the Recovery mode.
- BTC earned by a stacker is relative to the amount of STX they locked on the network.
What is Stacks (STX)? The Bitcoin Layer2 Network Explained
Stacks connects to Bitcoin and validates transactions through its proof-of-transfer consensus mechanism. Proof of transfer is a variation on another system called proof of burn, so it helps to understand how that works first. STX is available to trade on several prominent exchange platforms, including Binance,Coinbase, Kraken, Upbit, and KuCoin. For a full list of available trading pairs and supported platforms, see the markets section. The goal of the Nakamoto release is to enable the Stacks network to ‘write’ to the Bitcoin blockchain. This, according to the project, opens doors for a number of possibilities including the exchange of assets.
About Stacks
At the time, these tokens could not be traded by U.S. investors on U.S. exchanges. While other Bitcoin layer2 networks like Lightening Network reduces transaction processing times and reduce costs, Stacks allows developers to build dApps on Bitcoin. However, Stacks works on a different consensus mechanism called Proof-of-Transfer and has its own programming language called Clarity language. But, because the Stacks network is directly connected to the Bitcoin base layer, all the transactions that take place on Stacks are recorded directly on the Bitcoin blockchain. It’s in a competitive space, but it has some unique characteristics that set it apart from other programmable blockchains, especially the proof-of-transfer system.
What Is Stacks (STX) Coin?
The total supply of STX tokens is capped at 1.818 billion and more than 1.443 billion tokens are in circulation as of February, 2024. Because of its close relation with the original cryptocurrency, Bitcoin, its price is often follows the trend of Bitcoin market price. When the Bitcoin price crossed the $57,000 mark after around 2 years, the Stacks price is also witnessing a spike in February 2024. The Blockstack team spent years on research and development and securing funding.
One of the primary aspects that makes Stacks a unique project is its vision to make Bitcoin blockchain a smart contract compatible platform. While most of the blockchain networks that support smart contracts have programmable base layers, Stacks makes Bitcoin support smart contracts despite not having a programmable base layer. The STX token is central to the Stacks ecosystem, used for transaction fees, executing smart contracts, and participating in the Stacking consensus mechanism. Developed by Muneeb Ali and Ryan Shea, Stacks was introduced to address the limitations of Bitcoin in terms of programmability and DApp development.
Its close connection to the biggest cryptocurrency could be beneficial, especially since Stacks gives investors the opportunity to earn Bitcoin rewards. Stack claims that Clarity is secure by design, as it takes a syntax-level approach to smart contract handling so book value of equity per share bvps as to allow developers to worry less about extra security infrastructures for their applications. Stackers stake their STX tokens on the Stacks network while miners on the Bitcoin blockchain ‘lobby’ stackers to earn the rights to parse a block and sign off on them.
Another feature of Stacks network that makes it stand out from the rest of the projects is its Proof-of-Transfer consensus mechanism. Even though the main focus of Stacks project is to bring smart contracts on to the Bitcoin blockchain, it doesn’t neglect scalability. By using micro blocks, Stacks processes more number of transactions per send, improving the scalability of Bitcoin. Additionally, it Clarity programming language is one of the distiguidhed laungague used so far in the blockchain industry. Arkadiko claims to offer self-paying loans and a collateralized stable coin on the Stacks network.
The fact that you can earn Bitcoin rewards by stacking STX tokens is also a significant benefit. StackSwap also runs a launchpad which it claims to be designed to foster young projects on the network. StackSwap also claims to offer utility to NFT enthusiasts on the Stacks network through the StackSwap NFT marketplace and collection management facility. Through StackSwap’s cross-chain bridge, users can move assets between Bitcoin and the Stacks network.
Given the technical dependence of Stacks on the Bitcoin blockchain, its future success is dependent on Bitcoin’s continued stable operation. They also worked with the SEC for almost a year to meet its qualifications for a token sale. They were able to hold an SEC-qualified sale of STX tokens in July 2019.
However, Stacks would be hit harder than other blockchain networks because it relies so much on Bitcoin. Proof of burn requires that miners burn their own cryptocurrency to earn the right to validate transactions. To compensate them for their efforts, miners receive block rewards paid in the cryptocurrency they’re mining. The Stacks ecosystem will likely grow as more projects attempt to benefit from everything it promises to offer and stay in (indirectly) congruence with the oldest and most decentralized blockchain network. Having said this, note that this article is only for educational purposes and not financial advice.