Erik Weijers, 2 months ago

What is Stacks?

Stacks is a layer-1 blockchain that makes the execution of smart contracts possible. Unlike well-known smart-contract blockchains like Ethereum or Solana, Stacks builds on top of Bitcoin. Even though they're separate blockchains, Stacks and Bitcoin work together.

Stacks has its own nodes, its own network, its own miners as well as its own coin (STX). Contrary to other Bitcoin sidechains, Stacks is not pegged to on-chain BTC. Instead, the Stacks blockchain uses the Bitcoin blockchain as a storage medium: all transactions that happen on Stacks are recorded on Bitcoin itself. In other words, Stacks entire state settles on Bitcoin. To create a Stacks block, a Bitcoin transaction has to be initiated on the Bitcoin blockchain itself.

Stack's consensus mechanism

Stacks’ consensus mechanism is much like Bitcoin’s proof-of-work mechanism. But instead of using energy and running hardware to hash, Stacks miners need to send a Bitcoin transaction to predefined and randomized Bitcoin addresses. This is the cost they pay to produce blocks within the Stacks chain. Miners are compensated in the form of block rewards and transactions fees from the Stacks network. This means that if the Bitcoin price goes up while STX price falters, mining could become unprofitable until the relative prices are more balanced again.

The block reward is issued in native coin STX. The block rewards are as follows:

  • 1,000 STX per block are issued in the first 4 years of mining after the mainnet launch
  • 500 STX per block are issued during the following 4 years
  • 250 STX per block are issued during the following 4 years
  • 125 STX per block are issued from then on

The Stacks halvings run in parallel with Bitcoin halvings.

Block time also runs in parallel with block creation of Bitcoin. Stacks blocks that are confirmed simultaneously to Bitcoin blocks are called anchor blocks: they occur every 10 minutes on average, like Bitcoin's. But to scale, the Stacks blockchain has a mechanism called microblocks that makes increased transaction throughput possible in between these anchor blocks.

Smart contract language: Clarity

The programming language that Stacks uses to create smart contracts is Clarity. It allows for defi applications but also use cases like: NFT's, subscriptions and app-specific blockchains.

The founders of Stacks

The Stacks project was founded by Muneeb Ali and Ryan Shea after meeting at Princeton. They had the grand ambition of using Bitcoin as the cornerstone for applications that use smart contracts. What also spoke of their ambition, was that they raised $23 million in the first-ever SEC-qualified ICO in United States history. This backing from the notorious SEC (Securities and Exchange Commission) was a remarkable feat in itself. In early 2021 the mainnet of Stacks 2.0 went live.

Involvement in Miamicoin

You might have heard of Stacks in the context of Miamicoin or other CityCoins. CityCoins are based on Stacks A CityCoin such as MiamiCoin can be viewed as a community token, that can pay yield to its residents.

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