What is Stacks and STX Token? It Enables DeFi, NFTs, Apps and Smart Contracts for Bitcoin

Michael 0:00
Welcome to the New to Crypto Podcast designed to guide you through the crypto landscape with pinpoint accuracy created for the new and intermediate crypto investor. Join your host Crypto Travels Michael as he takes you through the different facets of getting started and succeeding in your crypto journey. New to crypto podcast brings you new episodes daily Monday through Friday with surprise bonus episodes sometimes on the weekend. Let me ask you, are you new to crypto and don’t know where to start? Are you more experienced but have questions? Then you’re in the right place. This podcast is designed for you coming at you from the Trading Center and the Lifestyle Dezign Studio. Here’s your host Crypto Travels Michael.

Hey, welcome to the podcast. I’ll tell you this show has been growing and exploding. I’m excited about the things that we’re working on for the coming New Year in 2022 to share with you. Today’s episode is all about Stacks. So what is Stacks? Stacks is a platform that facilitates the use of smart contracts and decentralized applications on the network. The blockchain platform generates its power from Bitcoin, as it depends on it for security, and the execution of transactions. The Bitcoin network acts as the finality and security layer for the smart contracts contained and executed in the Stacks blockchain. Meanwhile, it is possible through the proof of transfer mechanism. The platform adopts the connection between Stacks blockchain and Bitcoin enables execution of transactions on the Stacks network, as well as verification on the Bitcoin Blockchain. So let’s break down some benefits and features. Proof of transfer. Unlike other blockchain projects that utilize the proof of work and proof of stake mechanism to secure their network Stacks has developed a new consensus algorithm that is perfectly suitable for its operation and to secure the network.

The mechanism is deduced from the proof of burn concept known as proof of transfer. It has marked the first consensus mechanism to use to blockchains and this concept ensures that already mined and existing cryptocurrencies of an existing and verified blockchain are not burnt. Instead, they secure the new blockchain. The proof of transfer mechanism eliminates the system of burning cryptocurrencies, it requires the mind cryptocurrencies are transferred to other participants within the ecosystem. The new proof of transfer consensus mechanism helps the network to facilitate its reward protocol. And it’s interesting to say that the system allows the network participants to receive rewards as well as transaction payouts in existing and stable cryptocurrencies. It gives these participants the opportunity to participate in new blockchain at the same time. This system allows Stacks to eliminate challenges that users experience with new blockchains. Thus, new users feel confident about joining the network. Since the network is basically integrated with an already existing blockchain, being Bitcoin. It uses an extremely safe blockchain to secure new chains, without the need to require new Proof of Work chains and cryptocurrencies.

The Stacks blockchain provides support for smart contracts and decentralized applications, also known as dapps. It also enhances the creation of flexible virtual assets that are easily transferable. In a bid to provide support for the smart contracts. The network uses the clarity programming language to secure these activities. Clarity programming language is predictable programming language that uses no compiler. Stacks has deployed this programming language to help it bring smart contracts to Bitcoin. More precisely, the programming language uses predictable source code for executing smart contracts while publishing them on the blockchain nodes. So let’s break down the connection between Stacks and Bitcoin for a second. Stacks and Bitcoin are basically two interconnected blockchain networks that work hand in hand. It is quite interesting that both blockchain networks do not depend on each other. They are independent networks connected through the proof of transfer consensus mechanism. Via this system, miners can transfer new crypto currencies as well as smart contracts on Bitcoin to other participants of the Stacks network. Let’s go over the upgraded the 2.0 Stacks. 2.0 is an upgraded innovation from the Stacks team to bring secure apps and smart contracts to Bitcoin, and the Stacks. 2.0 main net launch allows developers to utilize the Stax protocol to build a user own internet on Bitcoin.

The platform allows users to earn bitcoins. So what are some Stacks use cases Stacks has offered amazing functionality for its ecosystem, especially to the Bitcoin network, it proposes new features to the Bitcoin network, since bitcoin is static and not flexible for adjustments through its integration with Bitcoin. Users can initiate new features to the network, without having to change Bitcoin itself. A major challenge for the Bitcoin network is scalability, and Stacks blockchain seeks to solve the scaling issues with Bitcoin. Stacks extends the Bitcoin transaction capacity. Since Bitcoin has limited space for transactions, Stacks adopts bitcoin’s efficient security, and finality to protect transactions conducted within the ecosystem. The network uses Bitcoin to settle transactions on the Bitcoin Blockchain for each block generated. Let’s go over the token for a moment, that STX token is the token of the Stacks blockchain, and the activities performed on the network rely on STX tokens. STX tokens basically foster the execution of smart contracts on the Stacks network. So the token functions as a tool to publish new smart contracts to the blockchain. It is also used for transaction processes, such as paying fees and receiving rewards. The token follows the same successful trail with its blockchain network. It has attracted the interest of a significant number of users, especially users who crave clarity smart contracts.

The token is available to trade on different current cryptocurrency exchanges. And I highly recommend that you you do a deeper dive and some more research on this project. It’s really interesting, and this is what I’m going to be looking and following in the future. If you’d like today’s episode, definitely like and subscribe to the podcast. We’re available on all major platforms and also on YouTube throughout 2022 we’ll be interviewing some of the top names in crypto and in the in the investment world, and I look forward to bringing you quality content and value as the time goes on. Definitely chime in here tomorrow for another special episode. Until then, make it a great day.

Thanks for tuning in to New To Crypto Podcast. If you liked the episode, be sure to follow and subscribe. You can listen to every episode on all major platforms. Have an interest in being on the show or want advertising reach out at new to crypto.io. Head over to our site new to crypto.io to access the resources mentioned in each episode. Until next time, remember to navigate the crypto landscape with pinpoint accuracy.