What is Stacks?

STX is a popular altcoin among investors. However, before you Trade STX, it is vital that you understand what you are investing in. Let's find out what's STX and how it functions.

Stacks is a layer-1 blockchain solution that integrates smart contracts and decentralized apps (DApps) to Bitcoin (BTC). These smart contracts are implemented in Bitcoin without compromising its core strengths, such as its security and stability.

These DApps are open and modular, which means that developers may build on top of each other's apps to create features that are just not feasible in a standard app. Since Stacks employs Bitcoin as its foundation, all network activity is settled on Bitcoin, the most popular and, perhaps, most secure blockchain currently in existence.

The Stacks token (STX) fuels the platform, allowing smart contracts to be executed, transactions to be processed, and new digital assets to be registered on the Stacks 2.0 blockchain.

The platform was renamed Stacks from Blockstack in the fourth quarter of 2020 to separate the ecosystem and open source project from Blockstack PBC, the corporation responsible for developing the original protocols. The Stacks 2.0 mainnet went live in the first month of 2021.

How is Stacks different?

Stacks intends to build upon Bitcoin's existing strengths and add new features without forking or altering the Bitcoin network.

This is achieved using a proof-of-transfer (PoX) consensus mechanism that integrates directly with the Bitcoin blockchain and requires miners to pay in Bitcoin (BTC) to create new Stacks (STX) tokens. In addition, STX token holders can stack (not stake) their tokens for a chance at Bitcoin payouts.

Clarity, a new smart contract programming language introduced by Stacks, aims to be both safe and user-friendly by virtue of its straightforward syntax. The Algorand (ALGO) blockchain also uses this language because of its focus on smart contracts.

Furthermore, in July of 2019, Stacks launched a $28 million Reg A+ sale cash offering for its STX tokens, making it the first cryptocurrency to achieve SEC approval for a sale in the United States.

How many STX tokens are there?

The revised economic strategy introduced with Stacks 2.0 will limit the circulating quantity of the newly unlocked STX by roughly 10%.

According to the Stacks 2.0 whitepaper draught (v0.1), a total of 1,000 STX will be distributed per block in the first four years from launch, 500 STX/block in the second set of four years, 250 STX/block in the third set of four years, and 125 STX/block thereafter indefinitely.

In total, the founder received 6.6% of the total genesis supply (1.32 billion STX), while the Stacks team received 7.9%. These have a three-year vesting period.

Network security

Stacks' foundational layer is the Bitcoin blockchain. Bitcoin's blockchain is built on Proof of Work (PoW), which makes it computationally and economically infeasible to corrupt the network through the joint efforts of thousands of miners and nodes.

In addition, Stacks offers its own consensus model, proof-of-transfer (PoX), a revolutionary mining process in which users transfer the base currency (BTC) to mine STX, so essentially bootstrapping the security of the Stacks blockchain using BTC.

Founders

Stacks' first funding came from several notable VC firms, including Y Combinator, Digital Currency Group, and Winklevoss Capital. It was developed by Blockstack PBC, which is based in New York.

Blockstack PBC is currently known as Hiro Systems PBC, and it is one of several firms that develop on the Stacks' platform.

Muneeb Ali and Ryan Shea established Blockstack PBC. After receiving his master's degree and a doctorate in computer science from Princeton University, Muneeb Ali co-founded Stacks in 2013 and continues to work with the platform in his current role as chief executive officer of Hiro Systems PBC.

Ryan Shea, the platform's second co-founder, also served as co-CEO from 2013 and 2018 before leaving the project to explore other ventures. Shea has been in the field of software development for a while now, although he was an engineer before joining Stacks.

Where can you buy STX?

STX is available on the licensed cryptocurrency exchange CryptoForce and several other national and international exchanges.

Disclaimer: Cryptocurrencies are highly volatile and subject to market, technical, and regulatory risks. Crypto trading requires one’s own diligence, and Cryptoforce will not be responsible for any losses incurred. Any information provided here should not be regarded as Cryptoforce’s technical or financial advice