Is Bitcoin bullish? Understanding the upcoming Nakamoto version to be released by Stacks.
Original Author: Alex Nguyen
Original Translation: Deep Tide TechFlow
Stacks, as a smart contract platform, enables Bitcoin to be used for decentralized applications and decentralized finance (DeFi), unlocking trillions of potential Bitcoin capital. In this article, cryptocurrency analyst Alex Nguyen will explain Stacks and its upcoming Nakamoto version, and why this is bullish for Bitcoin.
Stacks allows developers to build dApps that utilize real Bitcoin for payments, staking, tokens, non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), and more. It achieves decentralized finance (DeFi), metaverse, Web 3.0, and other use cases by extending Bitcoin's scripting capabilities while respecting Bitcoin's principles.
Some key features of Stacks include:
A trustless cross-chain bridge with Bitcoin;
A new programming language called Clarity for more secure smart contracts;
Consensus achieved through Proof of Transfer (PoX), which involves the recycling of BTC energy;
Tight integration with Bitcoin nodes to react to BTC transactions.
Stacks achieves this goal through the following technologies:
Data recorded on Bitcoin to achieve trustless verification of Stacks activities;
Inherits Bitcoin's security once Stacks transactions are confirmed by PoX blocks;
Utilizes Bitcoin's UTXO system;
Respects Bitcoin's monetary policy.
There is a symbiotic relationship between Stacks and Bitcoin:
Bitcoin provides security, liquidity, and a foundational monetary asset.
Stacks allows Bitcoin capital to be productive in advanced applications.
The next significant version is called Nakamoto, which includes:
sBTC - a trustless decentralized two-way peg that brings Bitcoin liquidity into smart contracts.
Finality of Bitcoin - Once confirmed in a PoX block, Stacks transactions are irreversible.
Faster blocks - Generate a block every 5 seconds while maintaining security.
sBTC allows decentralized minting of an asset that can be exchanged 1:1 for actual Bitcoin on Stacks.
sBTC has the potential to unlock trillions of dollars in capital for:
Using Bitcoin as collateral in DeFi;
Trustless Bitcoin trading on decentralized exchanges;
Issuing Bitcoin-backed stablecoins and assets;
Bitcoin payment channels.
The finality of Bitcoin ensures that Stacks transactions are irreversible within approximately 100 PoX blocks and requires a deep reorganization of Bitcoin to be undone. This not only inherits the probabilistic immutability of Stacks, but also the security of Bitcoin.
The faster approximately 5-second blocks greatly enhance transaction throughput, improving the responsiveness of dApps while maintaining the security of Bitcoin settlements.
By enhancing the functionality of Bitcoin while deeply respecting the BTC ethos, Stacks + Nakamoto can unlock the full potential of Bitcoin in Web 3.0. Hundreds of teams are already using Stacks to build dApps, tokens, non-fungible tokens (NFTs), DeFi, DAOs, and more.
Stacks and Nakamoto versions of the release will transform Bitcoin into the foundational settlement layer and reserve asset of the open metaverse, which is autonomous, censorship-resistant, trustless, and empowers individuals.
