What Is Stacks (STX) How It Works & Where To Buy It?

Stacks blockchain is a layer-1 blockchain project that relies on the Bitcoin network for security and transactional finality.

Stacks network uses a proof of transfer consensus mechanism to secure blockchain actions and digital assets that are transferred on the platform.

STX is the native cryptocurrency used to power the Stacks Blockchain and is currently the 67th largest cryptocurrency by market capitalization.

How Stacks (STX) Works

Most blockchains have either a proof-of-stake or proof-of-work consensus mechanism that is used to secure their network. However, Stacks developed the proof-of-transfer mechanism to secure its network.

Interestingly, it is the first consensus mechanism that uses two blockchains. Essentially, instead of burning mined and existing crypto tokens, they are used to secure the new blockchain.

Participants receive mined cryptocurrencies that are transferred to them as well as other participants in the ecosystem.

The reward protocol of the network is streamlined because of the PoT (Proof of Trust) consensus mechanism. Additionally, participants can take part in the new blockchain and receive rewards as well as transactional payouts.

Simply put, users feel safer using a new blockchain because its security stems from an incredibly secure Bitcoin blockchain. This is used to secure new chains without needing PoW (Proof of Work) chains.

Because Stacks is virtually interconnected with the Bitcoin blockchain, in order to efficiently use smart contracts in the network it makes use of the Clarity programming language. This allows for predictability and security and allows for the seamless growth of the Stacks ecosystem.

The Stacks protocol and blockstack network utilizes the proof of transfer mechanism to facilitate secure smart contracts and additional functionality using Bitcoin. Stacks benefits from the security of the Bitcoin blockchain.

The Stacks whitepaper is an excellent resource to thoroughly research if you’re trying to fully understand what the protocol aims to achieve and how it works.

What Is Stacks (STX) Used For?

STX tokens play a key role in the facilitation of processes. Stacks tokens are used to execute actions on the blockchain network. Plus, STX token holders have additional advantages on the blockchain platform because holders receive rewards.

STX tokens are used to pay for transaction fees and the STX cryptocurrency is also frequently traded by members of the Stacks community.

Essentially, the blockstack network allows users to remain in control of their data through two main systems. The first is ‘Gaia’ a system that allows users to create their own unique ID that can be used on the network. The second is how every individual receives unique and private access to data through private data lockers.

STX has quickly grown to become one of the most traded and popular cryptocurrencies on the market. The STX token experiences daily price fluctuations and many individuals participate in swing or arbitrage trading of STX tokens.

Where To Buy Stacks Token (STX)

STX is currently one of the most popular cryptocurrencies on the market. The team has managed to make significant strides in the crypto space, and the Stacks community seems to be confident in the project’s future.

STX tokens are commonly traded on most centralized crypto exchanges. Before you’re able to purchase STX, you’ll need to deposit fiat money onto an exchange; sequentially, STX tokens will then be credited to your digital wallet on the exchange.

The crypto exchanges below are amongst the safest place where you can buy, sell and store tokens.

1. Gate.io
2. HTX
3. KuCoin
4. Binance
5. Crypto.com

Token holders can transfer their tokens to a compatible digital wallet such as MetaMask. This is essential if users are looking to participate in DApps within the Stacks ecosystem.

Additionally, many users can earn generous yields from staking STX tokens on crypto exchanges.

About Stacks (STX)

How long has Stacks (STX) existed?

Stacks was initially founded in 2013 although it didn’t become the first SEC qualified token until 2019. The mainnet went live in 2019, and since then, the native STX token is still trading at double its listing price.

STX launched at $0.19 and reach an all-time high of $2.90 on the 1st of December 2021.

However, the market’s bearish sentiment has led to a price depreciation, as has been the case with several cryptocurrencies. STX token is currently trading at $0.54 as of May 2022.

STX achieved its highest market cap in December 2021 – where it had a market cap exceeding $3 billion.

What’s controversial about Stacks (STX)?

Most crypto projects are surrounded by some form of controversy and communities that aren’t aligned with the claims of the particular project. Before investing in any crypto project, it’s important to do as much research as possible on the project – research the solutions the project aims to provide, the team behind the project, any partnerships, the project’s whitepaper, and any other critical information associated with the project.

Let’s take a look at the top controversy surrounding Stacks (STX):

• Is layer-1 really needed for Bitcoin? – It’s important to understand certain fundamentals in the blockchain. Many individuals believe that Bitcoin is the purest and most decentralized blockchain that exists.

  This belief is evident for several reasons – no owner changes any of the code, the project is marketed by the community and it is the oldest blockchain. Because of this mentality, many members of the crypto community believe that Bitcoin and its functionality should never be altered, and if altered, the altered version would not be as secure or credible as Bitcoin.

  Many individuals, therefore, believe that a layer-1 project that gives the Bitcoin blockchain advanced DeFi capabilities isn’t truly credible or trustworthy in comparison to the original blockchain. Essentially, a large number of people would never support any projects that alter Bitcoin’s functionality.

How many STX Tokens are there?

At the time of writing, STX has a circulating supply of 1.32B STX (72% of the total supply).

The total supply of STX is 1,352,464,600.

The max supply of STX is 1,818,000,000.

Can STX be mined?

STX is a mineable cryptocurrency. The Proof of Transfer consensus mechanism means that the mining operates slightly differently from other blockchains.

STX Miners are tasked with electing leaders for each round – essentially Bitcoin is spent by sending transactions to the Bitcoin network.

New blocks are written to the Stacks blockchain through elected leaders – each selected through VRF.

STX miners then receive compensation in the form of STX tokens for their network contributions.

PoX mining is another way of mining STX. Essentially, this process involves transferring tokens that would’ve sequentially been burned. STX holders receive mined Bitcoin, and the miners receive newly minted STX tokens.

What is the market cap of Stacks blockchain?

The market cap of Stacks (STX) is: total amount of coins in circulation x current market price of STX.

Stacks (STX) Market Cap = 1.32B STX x $0,5447 = $716 million (67th largest market cap).

Stacks is currently one of the top 100 cryptocurrencies by market capitalization and continues to be a project that is seeing rapid user adoption.

Biggest Competitors Of Stacks (STX)

Stacks has developed an innovative project that is unique in the crypto space. It allows for the integration of smart contracts and DApps in the Bitcoin network. It is interconnected with the Bitcoin blockchain but the Stacks proof-of-transfer consensus mechanism removes the dependency on PoW as well as the scalability and DeFi restrictions of the Bitcoin blockchain.

There aren’t competitors in the space that are meeting the same needs, and building an ecosystem of DApps that allow for Bitcoin integration, with the ability to earn bitcoin rewards.

What Are The Future Plans For Stacks Blockchain And STX Token?

Stacks will continue to meet the user demands and try to ensure the most efficient and valuable way to extend the capabilities of the Bitcoin blockchain – allowing users to experience a more versatile blockchain.

The project has prioritized upgrading the network by incorporating layer-2 scaling solutions for Stacks, which will essentially be capable of handling any scalability issues in the future.

The future success of Stacks depends on how well the project can accommodate users, the demand for a protocol that provides these solutions, as well as how innovative the project remains in the coming months and years.

Pros And Cons Of Stacks Blockchain And STX Token

Pros:

• Varying layers of functionality – Stacks has varying layers that improve and optimize the functionality of the Bitcoin blockchain. The enhanced functionality is a unique value proponent that has yet to be realized by competing projects in an efficient and scalable way.
• Secure blockchain – Stacks benefits from the security of the Bitcoin blockchain. The Stacks blockchain can rely on arguably the most trusted blockchain that exists.
• Brings smart contract functionality – Stacks implements new utility and functionality to the Bitcoin blockchain by introducing smart contracts and DApps that are also secured by the Bitcoin blockchain.
• Attractive rewards for network participants – Miners and stakers are generously rewarded for their contributions to securing the network. STX stakers receive Bitcoin rewards and miners receive freshly minted STX tokens after transferring their Bitcoin to the Stacks blockchain.

Cons:

• Demand for the solutions – Stacks can offer a host of solutions to what has previously restricted Bitcoin’s functionality. However, the demand for these solutions is still not as high as anticipated. Many individuals believe that any additions to Bitcoin take away from the pure blockchain and its original functionality.