Stacks blockchain: Difference between revisions

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{{Short description|Bitcoin smart contract platform}}

{{Short description|Bitcoin smart contract platform}}'''Stacks''', formerly '''Blockstack''', is a [[Bitcoin]] layer-2 [[blockchain]].

'''Stacks''', formerly '''Blockstack''', is an open-source platform to enable [[smart contract]]s, DeFi, NFTs, and apps for Bitcoin. Stacks blockchain is a "layer" for [[Bitcoin]] similar to the [[Lightning Network]].<ref>{{Cite web|url=https://www.zdnet.com/article/blockstack-anchors-to-bitcoin-network-with-new-mining-algorithm/|title=Blockstack anchors to Bitcoin network with new mining algorithm|website=[[ZDNet]]}}</ref> In addition to smart contracts, the Stacks project provides open-source software for authentication, and data storage.<ref>{{cite journal

== History ==

| last1 = Mühle | first1 = A.

| last2 = Grüner |first2 = A.

| last3 = Gayvoronskaya | first3 = T.

| last4 = Meinel | first4 = C.

| title = A Survey on Essential Components of a Self-Sovereign Identity

| journal = Computer Science Review

| volume = 30

| pages = 80–86

| date = November 2018| arxiv = 1807.06346

| doi = 10.1016/j.cosrev.2018.10.002

| bibcode = 2018arXiv180706346M

| s2cid = 49867601

}}</ref>

The Blockstack project was originally founded by [[Muneeb Ali]] and Ryan Shea in 2013. By 2017, Blockstack locked in two additional funding rounds totalling $4 million. In 2017, Blockstack went on to launch an [[Initial coin offering|initial coin offering (ICO)]]. BlockStack PBC (now called [[Hiro PBC]]) was the first to launch a [[U.S. Securities and Exchange Commission|SEC]] qualified token offering in July 2019. The start-up spent almost a year to ensure they met the SEC qualifications.<ref name="wsj">{{Cite news |last=Vigna |first=Paul |date=2019-07-11 |title=SEC Clears Blockstack to Hold First Regulated Token Offering |url=https://www.wsj.com/articles/sec-clears-blockstack-to-hold-first-regulated-token-offering-11562794848 |access-date=2021-06-22 |work=Wall Street Journal |language=en-US |issn=0099-9660}}</ref>

== Design ==

{{expand section|date=August 2021}}

Concerns around internet privacy, security, and data breaches brought attention to the Stacks project.<ref>

{{cite news

| last = Singh

| first = Harminder

| title = 'New internet' looks to keep user data away from tech giants and bypass China censorship

| newspaper = South China Morning Post

| date = 1 October 2017

| url = https://www.scmp.com/news/hong-kong/economy/article/2113521/new-internet-looks-keep-user-data-away-tech-giants-and-bypass}}

</ref> Software developers have used the Stacks software to build decentralized alternatives to popular services.<ref>{{cite news

| last = Fung

| first = Brian

| title = The new technology that aspires to #DeleteFacebook for good

| newspaper = The Washington Post

| date = 23 March 2018

| url = https://www.washingtonpost.com/news/the-switch/wp/2018/03/23/the-new-technology-that-aspires-to-deletefacebook-for-good/?noredirect=on}}</ref><ref>

{{cite news

| last = Dillet

| first = Romain

| title = Stealthy wants to become the WeChat of blockchain apps

| newspaper = TechCrunch`

| date = 5 September 2018

| url = https://techcrunch.com/2018/09/05/stealthy-wants-to-become-the-wechat-of-blockchain-apps/}}

</ref><ref>

{{cite news

| last = Simonite

| first = Tom

| title = The Decentralized Internet Is Here, With Some Glitches

| newspaper = Wired Magazine

| date = 5 March 2018

| url = https://www.wired.com/story/the-decentralized-internet-is-here-with-some-glitches/}}

</ref> Unlike popular consensus that blockchains are used to, to build the user-owned internet, Stacks relies on a novel and innovative consensus algorithm called Proof of Transfer, which is the extension of Proof of Burn and uses the Bitcoin Proof of Work to secure the Stacks Blockchain. In addition to the consensus algorithm, Stacks developed Clarity, an innovative programming language for Bitcoin that can read and write back to Bitcoin. Stacks also make it possible to securely store user data and allow the latter to be in control of his data and information with the decentralized storage Gaia. Stacks started as a Decentralised Identity project on blockchain (Blockchain Naming System) to bring a global unique name to everyone. Stacks (STX) token is the native cryptocurrency of the Stacks blockchain, which is used as gas fee for executing smart contracts and processing transactions.<ref>{{cite news |last1=Daly |first1=Lyle |title=What is Stacks (STX)? |url=https://www.fool.com/investing/stock-market/market-sectors/financials/cryptocurrency-stocks/stacks/ |access-date=28 September 2022 |publisher=The Motley Fool |date=10 Jun 2022}}</ref>

In October 2020 the community rebranded Blockstack to Stacks.

With the introduction of the Stacks Blockchain 2.0 on 14 January 2021, Hiro PBC revoked their sole control of the network.{{cn|date=June 2025}} Due to this, the Stacks token could no longer be viewed as a security under SEC Regulation A+ qualifications and filed an exit report.<ref>{{Cite web |last=Chavez-Dreyfuss |first=Gertrude |date=7 December 2020 |title=Blockstack's Digital Currency 'Stacks' to Be Tradable in U.S. Once New Blockchain Arrives |url=https://www.usnews.com/news/technology/articles/2020-12-07/blockstacks-digital-currency-stacks-to-be-tradable-in-us-once-new-blockchain-arrives |work=U.S. News|agency=Reuters}}</ref>

'''<big>Proof of Transfer</big>'''

== Design ==

Stacks uses Proof of Transfer to secure its blockchain. Proof of Transfer is the consensus between two [[Blockchain|blockchains]] (in this case Bitcoin and Stacks) that involves two entities, miners and stackers. While miners, who are [[Bitcoin]] holders/miners commit [[Proof of work|Proof of Work]] [[cryptocurrencies]], stackers have to lock their Stacks tokens in the consensus to provide the valid chain to miners, and then earn Bitcoin that miners are spending on mining Stacks tokens. This mechanism helps Stacks state to be immutably recorded on the Bitcoin blockchain forever without any changes to the latter blockchain. In this particular protocol, Stacks chose Bitcoin for Stacks tokens mining because Bitcoin is the simplest, most secure, oldest, time-tested blockchain and represents the best store of value that favors Proof of Transfer mechanism implementation. Instead of using another source of energy to power the blockchain, Stacks has the best practice of using and recycling Bitcoin which is already an energy-proof cryptocurrency.

At its inception, Blockstack aimed to offer solutions to the problems of internet privacy, security and data breaches (especially in cloud storage).<ref>

{{cite news |last=Singh |first=Harminder |date=1 October 2017 |title='New internet' looks to keep user data away from tech giants and bypass China censorship |url=https://www.scmp.com/news/hong-kong/economy/article/2113521/new-internet-looks-keep-user-data-away-tech-giants-and-bypass |newspaper=South China Morning Post}}</ref> Blockstack perports to offer users greater choice in what data they share with other users and applications.<ref>{{cite news |last=Fung |first=Brian |date=23 March 2018 |title=The new technology that aspires to #DeleteFacebook for good |url=https://www.washingtonpost.com/news/the-switch/wp/2018/03/23/the-new-technology-that-aspires-to-deletefacebook-for-good/?noredirect=on |newspaper=The Washington Post}}</ref><ref>{{cite news |last=Dillet |first=Romain |date=5 September 2018 |title=Stealthy wants to become the WeChat of blockchain apps |url=https://techcrunch.com/2018/09/05/stealthy-wants-to-become-the-wechat-of-blockchain-apps/ |newspaper=TechCrunch`}}</ref><ref>{{cite news |last=Simonite |first=Tom |date=5 March 2018 |title=The Decentralized Internet Is Here, With Some Glitches |url=https://www.wired.com/story/the-decentralized-internet-is-here-with-some-glitches/ |newspaper=Wired Magazine}}</ref>

===CityCoins===

'''<big>Clarity Programming Language</big>'''

Developed [https://www.coindesk.com/algorand-and-blockstack-are-building-a-multi-chain-smart-contract-language in collaboration with Algorand blockchain developers and other independent developers entities], [https://clarity-lang.org/ Clarity] is an open-source and [https://iq.opengenus.org/non-turing-complete-programming-languages/#:~:text=Data%20Languages%20like%20HTML%2C%20XML,SQL92%20is%20not%20Turing%20Complete. Non-Turing complete] [[Smart contract|smart contract language.]] It is decidable, predictable, and human-readable. It does not allow a re-entrancy which is the major vulnerable point for some most popular smart contract programming languages like [https://soliditylang.org/ Solidity]. Clarity language's most important functionality is its visibility to the Bitcoin state. It can read the Bitcoin state and react to it. It is designed to ensure the security of users by helping users know exactly which contract they are signing as the contract written in Clarity is broadcasted and executed as it is written to the blockchain and has the [https://dev.to/stacks/understanding-stacks-post-conditions-e65 post conditions] to protect users from contract abuse and bugs. Clarity language allows applications to be deployed and secure by the Bitcoin blockchain.

'''<big>Decentralized Storage Gaia</big>'''

Gaia is a decentralized off-chain [[Computer data storage|data storage]] system for storing user data in a secure database to allow the user to have full control over his data and information. The structure of Gaia is strictly private and only the user with his keys can have access to his data storage in Gaia.

'''<big>Decentralized Identity Blockchain Naming System</big>'''

[https://en.m.wikipedia.org/wiki/Decentralized_identifier Decentralized identity] on the blockchain, a network system of Blockchain Naming System are global unique human-readable names that attach a Blockchain address to an off-chain state without relying on any centralized control where data are recorded directly on the blockchain. The name owner creates its own [https://en.m.wikipedia.org/wiki/Namespace namespace] and sets all its own properties because he strictly owns the name. The system does not allow name collision because names can only be registered once on a first come first serve basis. These names can also serve as Stacks or Bitcoin addresses to receive Stacks or Bitcoin cryptocurrencies.

'''<big>STX, Stacks native token</big>'''

As the native token of Stacks blockchain, STX serves different purposes. STX is primarily the [https://www.hiro.so/blog/an-introduction-to-blockchain-gas-fees transaction gas fee] token used to connect apps on Stacks blockchain to Bitcoin. It also serves as Stacks blockchain miners' reward that follows Bitcoin’s halving schedule, and allows decentralization of the Stacks network. Stacks tokens allow their holders to earn Bitcoin rewards while stacking them in the Proof of Transfer consensus. STX also has Bitcoin as reserve currency which makes STX more economically viable and can be used in decentralized finance on the Stacks blockchain.

== History ==

Stacks project was originally started by Muneeb Ali and Ryan Shea as Blockstack.<ref name=venturebeat>{{Cite web|date=2017-12-04|title=Blockstack raises $52 million to build a parallel internet where you own all your data|url=https://venturebeat.com/2017/12/04/blockstack-raises-52-million-to-build-a-parallel-internet-where-you-own-all-your-data/|access-date=2021-06-22|website=VentureBeat|language=en-US}}</ref> STX became the first [[U.S. Securities and Exchange Commission|SEC]] qualified token offering in 2019.<ref>{{Cite web|last=SEC|title=PART II — INFORMATION REQUIRED IN OFFERING CIRCULAR|url=https://www.sec.gov/Archives/edgar/data/1719379/000110465919020748/a18-15736_1partiiandiii.htm|access-date=2021-06-22|website=www.sec.gov}}</ref><ref name=wsj>{{Cite news|last=Vigna|first=Paul|date=2019-07-11|title=SEC Clears Blockstack to Hold First Regulated Token Offering|language=en-US|work=Wall Street Journal|url=https://www.wsj.com/articles/sec-clears-blockstack-to-hold-first-regulated-token-offering-11562794848|access-date=2021-06-22|issn=0099-9660}}</ref> Blockstack PBC, a company working on the Stacks technology, raised around $75 million through a mix of venture capital and token sales.<ref name="venturebeat" /> The main Stacks blockchain launched in Jan 2021.<ref>{{Cite news|last=Chavez-Dreyfuss|first=Gertrude|date=2020-12-07|title=Blockstack's digital currency 'Stacks' to be tradable in U.S. once new blockchain arrives|language=en-US|work=Reuters|url=https://www.reuters.com/article/crypto-currencies-blockstack/blockstacks-digital-currency-stacks-to-be-tradable-in-u-s-once-new-blockchain-arrives-idUSKBN28H22O}}</ref>

==Applications==

=== Blockchain Naming System (BNS) ===

The Blockchain Naming System is an application used to register human-readable, globally unique names with accounts on the Stacks blockchain. A BNS name consists of a namespace, the name and optionally a subdomain.<ref>{{Cite web |title=sebis TU München : Master's Thesis Martin Schäffner |url=https://wwwmatthes.in.tum.de/pages/hhh5oin2o5sw/Master-s-Thesis-Martin-Schaeffner |access-date=2023-01-22 |website=wwwmatthes.in.tum.de}}</ref> Examples are muneeb.id, muneeb.btc and muneeb.id.blockstack.

===CityCoins===

In 2021, the CityCoins project launched fungible tokens for the cities of Miami and New York City.<ref>{{Cite news|last=Brown|first=Dalvin|date=2021-09-30|title=Crypto tax: 'MiamiCoin' has made the city $7 million so far, a potential game-changer for revenue collection|language=en-US|newspaper=Washington Post|url=https://www.washingtonpost.com/technology/2021/09/30/crypto-miamicoin/}}</ref><ref>{{Cite news|last=Chen|first=Elaine|date=2021-11-03|title=Eric Adams Aims to Make NYC Crypto-Friendly With Coin Similar to Miami's|language=en-US|work=Bloomberg|url=https://www.bloomberg.com/news/articles/2021-11-03/mayor-elect-eric-adams-to-explore-nyc-coin-similar-to-miami-s}}</ref> In September 2021, Miami's city commissioners voted to accept the protocol treasury,{{Context inline|date=November 2021}} valued at $21 million at the time.<ref>{{Cite news|last=Greely|first=Brendan|date=2021-11-03|title=MiamiCoin, a currency without sovereignty|language=en-US|work=Financial Times|url=https://www.ft.com/content/f2907890-c2da-4959-bc39-589ada847b0a}}</ref> MiamiCoin's value crashed, and so Stacks donated $5.25M to the City of Miami.<ref>{{Cite web |last=Benavides |first=Cristian |date=February 3, 2022 |title=Miami Announces It Cashed Out Some MiamiCoin as Crypto Markets Are Down |url=https://www.nbcmiami.com/news/local/miami-announces-it-cashed-out-some-miamicoin-as-crypto-markets-are-down/2680613/ |access-date=2022-04-13 |website=NBC 6 South Florida |language=en-US}}</ref>

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