Bitcoin star public chain Stacks, how far can it go in the future
Original Author: Daniel Li
With the popularity of the Bitcoin NFT protocol Ordinals, the entire Bitcoin NFT market has opened a new round of competition. Stacks has benefited from being one of the first blockchains capable of producing bitcoin ordinals. Its token, STX, has quadrupled in price over the past ten days. Although the market has recently started a downward trend and the price of STX has also dropped to $0.69, it is still a popular currency and is favored by many investors. However, the popularity of Ordinals has also raised a problem. As more and more Bitcoin NFT projects emerge, the Bitcoin network may be congested, which will test the idea of Bitcoin minimalism. For Stacks, which is the Bitcoin L2 public chain, this is both a challenge and a rare opportunity.
Bitcoin star public chain Stacks is born for breakthrough
Blockchain has always had a technical problem known as the "impossible triangle", that is, in terms of decentralization, security and scalability, only two of them can be satisfied at the same time. As one of the earliest public chains, Bitcoin also follows this principle. Bitcoin has done the best in terms of decentralization and security, but has made a big compromise in terms of scalability, resulting in very poor scalability. It takes 10 minutes to write a new block and the transaction confirmation time It is as high as tens of minutes. Because of these restrictions, although Bitcoin has been developed for more than ten years, it still exists as a pure value public chain.
In addition to technical aspects, social differences are also one of the reasons that affect the expansion of Bitcoin. Bitcoin fundamentalists believe that the current Bitcoin is good enough as a value public chain, and there is no need for expansion to increase transaction speed. They believe that expansion may change the consensus mechanism of Bitcoin, leading to a hard fork of Bitcoin, affecting the security and decentralization of Bitcoin. In addition, the deployment of various complex smart contracts and applications on the Bitcoin network will also cause congestion in the Bitcoin network and increase Gas costs, which deviates from Satoshi Nakamoto's vision of using Bitcoin as a peer-to-peer (P2P) cash system. Therefore, they oppose the expansion of Bitcoin and advocate maintaining the simplicity and stability of the Bitcoin network.
Technical difficulties and community disagreements make the expansion process of Bitcoin slow and tortuous. Before the advent of Stacks, there were many projects trying to improve the scalability of Bitcoin, but most of them disappeared, and only a few forked projects became popular for a short time due to hype. In contrast, Stacks is undoubtedly the most successful one.
The success of Stacks is mainly due to its finding a balance between Bitcoin fundamentalism and scaling.
The native Bitcoin network itself does not support smart contracts and decentralized applications, so a second-layer protocol is needed to implement these functions. Stacks is one such protocol that enables the deployment of smart contracts and decentralized applications on the Bitcoin network by building a new blockchain. The Stacks blockchain interacts with the Bitcoin network, using Bitcoin's security and network effects to ensure its security and decentralization, while not making any changes to the Bitcoin network, keeping the Bitcoin network simple and stable sex.
Technological Innovations and Benefits of Stacks
Recently, due to the popularity of Ordinals, the public began to focus on the Bitcoin expansion issue that had not been paid much attention before. People were surprised to find the existence of Stacks. When people habitually think that Stacks is also a short-term Internet celebrity product At the time, I didn't know that Stacks had been quietly working on the road of building Bitby's second-layer network for nearly 10 years.
Stacks is an independent blockchain based on the Bitcoin blockchain, created in 2013 by Muneeb Ali and Ryan Shea. use"Proof of Transfer"(PoX) protocol that leverages the security of Bitcoin and Stacks Tokens (STX) to implement smart contracts. Early focus on DApps development and providing a decentralized experience combined with Bitcoin security. With Bitcoin congestion and high fees, Stacks began to study the use of Bitcoin's second-layer technology (such as Lightning Network) to expand network throughput and transaction speed, and launched Stacks 2.0 to achieve high-throughput, low-cost and instant settlement transactions .
Stacks has many advantages in terms of technology, which are reflected in the following aspects:
(1) PoX mining mechanism: Stacks uses the PoX mining mechanism to replace the traditional PoW or PoS mining mechanism, thus solving many problems in the traditional mining mechanism, such as energy consumption, computing power competition, etc.
(2) Clarity smart contract language: Stacks has developed a smart contract language called Clarity, which has a strong type system and clear execution logic, and can execute secure smart contracts without the need for a middleman, thereby improving the The reliability and operability of smart contracts.
(3) Decentralized authentication: Stacks provides an authentication system called Blockstack, which uses blockchain technology and public key infrastructure to achieve decentralized authentication and management of users, thereby improving user Privacy and Security.
(4) Integration with Bitcoin: Stacks integrates with Bitcoin, which can extend the security, reliability and market participation of Bitcoin to the Stacks ecosystem, thereby achieving higher decentralization and security.
(5) Compatible with existing web technologies: Stacks can be compatible with existing web technologies, such as using JavaScript to develop decentralized applications, making it easier for developers to build decentralized applications.
In short, the technological innovation and advantages of Stacks enable it to achieve higher decentralization, higher security and reliability, and have better scalability and sustainability, providing support for the development of its ecosystem. strong support.
The Rise of Bitcoin NFTs, Opportunities and Challenges for Stacks
The emergence of Ordinals has triggered another wave of enthusiasm in the field of Bitcoin applications. As a representative L2 project of Bitcoin, Stacks is in an excellent position to benefit from the market hype. According to data from Defi Llama, in the last 30 days (February 1st to March 2nd), funds on Stacks have increased by 254%, and TVL has risen from $7.56 million to $26.8 million. Stacks native token STX has tripled in the past ten days. Although the price of STX has experienced a correction due to the impact of the big market drop in recent days, investors are generally optimistic about the future of STX.
Investors are optimistic about STX mainly based on the expectation of Bitcoin halving in 2024. As the token of the Bitcoin Layer 2 expansion protocol, the value of STX is closely related to Bitcoin. Therefore, although STX seems to have exhausted the growth trend brought about by Ordinals, STX is still regarded as a cryptocurrency worthy of long-term investment due to the future halving of Bitcoin and the good development trend of Stacks.
The Bitcoin NFT boom caused by Ordinals is getting bigger and bigger, and this year may become the Summer of Bitcoin NFT. This is an excellent development opportunity for Bitcoin scaling protocols such as Stacks. Especially Stacks, which is not only highly integrated technically with the Bitcoin ecosystem, but also has a more sustainable and decentralized economic model, making it more room for development than other public chains.
In addition to the positive side, Ordinal's explosion has also raised a previous problem: if NFTs cause network congestion, Bitcoin's minimalist ideology will face a test. Whether the Bitcoin community will allow this kind of speculation or block the network to develop in the long run.
The current opposition point of view focuses on NFTs harming the original use case of Bitcoin. Some community members said, "Allowing Bitcoin to be used for NFT is a bit like allowing hospitals to be used for rave parties." Supporters believe that the rise of Bitcoin NFT has found new application scenarios beyond traditional value storage, providing Bitcoin with more gameplay and financial use cases. From the data point of view, both views can be verified. According to data from OKLink, Ordinal's "Inscription" is consuming 50% of the Bitcoin block space, and the block space utilization rate has reached 100%. On the other hand, from the perspective of miners, the emergence of Bitcoin NFT has also brought them a new way of income growth. In the past week, the cost of engraving "inscriptions" through the Ordinal agreement has reached a total of 880,000 US dollars.
Neither side has been able to convince the other so far. This seems to harken back to the Bitcoin fundamentalist-versus-scalability debate Stacks faced in the first place. Last time, Stacks found a balance between the two parties. This time, the debate about Bitcoin NFT can find a balance that is acceptable to both parties. challenge.
Stacks Popular Ecological Project Inventory
With the rise of the Bitcoin NFT craze, more and more investors are optimistic about Stacks. As an important part of the Bitcoin ecosystem, Stacks provides users with more secure, efficient, and sustainable smart contract services, and has the potential for collaborative innovation with other cryptocurrency projects and traditional financial markets. In view of the huge user base of Bitcoin, the close integration of Stacks with the Bitcoin ecosystem, a more sustainable and decentralized economic model, better privacy protection, and higher performance make it more attractive than other public chains. Greater room for development. Currently, Stacks projects worthy of attention:
Alex Recently, Bitcoin has undergone a cultural and technological transformation through Ordinals and Stacks. On Stacks, one project that is expected to stand out in the future is ALEX. ALEX is a DEX designed specifically for Bitcoin, and it is the first platform to provide one-stop DeFi services on Bitcoin through Stacks.
The core functions of the ALEX protocol include decentralized transactions and decentralized lending. Users can trade on decentralized exchanges and obtain liquidity from liquidity providers. With collateral-based lending, users can mortgage digital assets to obtain stablecoins for money management without the need to sell assets. ALEX also issued the governance token ALEX. Users holding ALEX tokens can participate in the governance process of the agreement, including proposals, voting and decision-making. Through the liquidity mining mechanism, ALEX Labs encourages users to provide liquidity, participate in the ecology of the protocol, and obtain ALEX tokens as rewards by providing liquidity.
Gamma
Gamma is an NFT marketplace based on the Stacks ecosystem, earlier known as STXNFT. The marketplace aims to be a Web3 hub for collectors, creators and investors to discover, trade and showcase NFTs through the Bitcoin ecosystem.
Recently, with the rise of BTC NFT (Ordinals Technology), NFT activity on Stacks is gradually increasing. According to DappRadar data, Gamma has seen transaction volume growth of more than 300% in the past 30 days. This is mainly due to the low cost and fast NFT minting speed provided by the Stacks ecosystem.
Gamma is a premier NFT marketplace where users can explore dozens of different collections that are growing in popularity. Additionally, the Gamma platform offers a professional, creator-first NFT Launchpad for digital artists looking for an easy way to deploy low-code smart contracts. Using Gamma, even inexperienced artists can create smart contract functions for their NFTs in minutes, ensuring ownership of their NFTs and protecting their work like a copyright. Beyond that, Gamma acts as a social platform where creators can come together to collaborate and share ideas. Gamma currently has a number of popular NFT collections that have built a cult following in the Web3 world. In fact, many collections are already in demand, and some projects even launch secondary collections to lower the barrier to entry for their communities.
Arkadiko
Arkadiko is a DeFi platform built on the Stacks ecosystem, aiming to provide users with various financial products and services, including lending, trading, staking, earning income, and more. Different from other DeFi platforms, Arkadiko is built on the Stacks ecosystem and adopts Stacks' unique technical architecture, which means that it can realize decentralized financial services on the Bitcoin blockchain.
The main application of the Arkadiko platform is the USDA stablecoin of the mortgage asset casting platform. The model is similar to that of MakerDAO. Users deposit STX in Arkadiko’s Vault, and cast the stablecoin USDA softly anchored in the US dollar through over-collateralization. The STX can also rely on the PoX mechanism of Stacks to obtain income. In addition, users can also use STX tokens as a tool for transactions and payment fees, and obtain loans by staking STX tokens. Arkadiko’s low lending rates are very attractive to users. In addition, Arkadiko also provides functions such as liquidity pools, stable currency transactions, and income farms, allowing users to participate in more DeFi products and services. At the same time, Arkadiko's development team is committed to providing more innovative DeFi products and services to provide users with a better financial experience.
CityCoins
CityCoins is a cryptocurrency designed to provide financial support to cities and boost their economies. Founded in 2021 by Muneeb Ali and Ryan Shea, the project is powered by the Stacks ecosystem.
Summarize
Summarize
With the popularity of Ordinals, the Bitcoin NFT market is growing rapidly. This is both a major opportunity and a serious challenge for Stacks. In order to meet the high-throughput requirements of the Bitcoin NFT project, Stacks needs to further leverage its technical advantages in the Bitcoin Layer 2 expansion solution and launch a more scalable network solution. At the same time, Stacks needs to further strengthen its integration with the Bitcoin network to ensure its security without affecting the stability of the Bitcoin network. If Stacks can successfully overcome these challenges, it will become one of the most successful scaling solutions in the Bitcoin space, laying the foundation for the future development of the Bitcoin network.
