Blockstack — Sta(c)king on Bitcoin
Bitcoin — the king of cryptocurrencies — uses the Proof of Work POW consensus algorithm to secure its network. The high decentralization of the network makes the manipulation of the network impossible with today’s computing technology. This makes the Bitcoin network the most secure and largest blockchain network. However, due to the enormous energy demand, low bandwidth, high transaction fees and limiting possibilities for developers, the language in which it is written make it inefficient for everyday use. Therefore, Bitcoin is only viewed as digital gold. An asset designed to hold value.
The Proof of Stake POS algorithm provides a more scalable blockchain with higher transaction throughput. Most blockchains today use this consensus and its derivatives to secure the creation of new blocks. With this solution, the costs of energy consumption are negligible compared to the Proof of Work algorithm. However, it is less secure than a fully decentralized POW algorithm.
Blockstack uses a new Proof of Transfer POX consensus algorithm that allows the use of a highly secured Bitcoin network to create blocks in new blockchain such as Stacks. For example, by using the new Clarity programming language, we can develop the most secure Smart Contracts, opening the gate to the DeFi world for Bitcoin.
Miners wishing to secure the new network can spend their Bitcoins, which will participate in the creation of new blocks in Stacks blockchain. In return, they will receive STX coins. Also STX holders, called Stackers, optionally lock up their STX for a number of reward cycles, and in doing so receive Bitcoin. This is one of the amazing things about proof of transfer versus other proof of stake protocols:
- Miners spend Bitcoin to receive Stacks (STX)
- Stackers lock up Stacks (STX) to receive Bitcoin
Participants, on the other hand, will be rewarded in Bitcoin for the content they create. This will ensure stability in the early stages of project development.
Every great project needs solid foundations on which to build great visions. The goal of Blockstack is to create a decentralized Internet (Web 3.0), the core of which is responsible for security is the Bitcoin network.
We are far from using the full potential of the Internet now. Our private data, the content we create, and our interactions with others are one of the most valuable assets in the world that we do not own. We are only providers of data that others use.
Blockstack in the decentralized Internet restores the ownership rights of network users. This is the last and greatest step in the evolution of the internet.
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