What is Stacks (STX)? The Bitcoin Layer2 Network Explained

What is Stacks (STX) in Crypto?

Stacks, formerly known as Blockstack, is probably one of its own kind of network set out to revolutionaize the original Bitcoin blockchain network in unexpected ways. It is an open-source network and operates in parallel with Bitcoin blockchain, just like other sidechains and drivechains of Bitcoin, and brings advanced blockchain functionalities like smart contracts onto the blockchain.

While other Bitcoin layer2 networks like Lightening Network reduces transaction processing times and reduce costs, Stacks allows developers to build dApps on Bitcoin. However, Stacks works on a different consensus mechanism called Proof-of-Transfer and has its own programming language called Clarity language. But, because the Stacks network is directly connected to the Bitcoin base layer, all the transactions that take place on Stacks are recorded directly on the Bitcoin blockchain.

The Origin of Stacks Crypto

Stacks project idea initially germinated in the minds of two studious computer science graduates, Muneeb Ali and Ryan Shea, of the prestigious Princeton University. After years of research and development, the blockchain design was released in 2015. Even though it was initially called Blockstack, the name was changed to Stacks at the time of its launch in 2018.

While the testnet of Stacks network was launched in Q2 2018, the mainnet went live in the same year after a few months. The co-founders of the project, Muneeb Ali and Ryan Shea worked closely with the US SEC to ensure that they stay compliant in the whole process of launching Stacks coin, STX, and rising funds. It received immense appreciation from the industry for being one of the first SEC-qualified projects to raise funds.

What Makes Stacks Unique?

One of the primary aspects that makes Stacks a unique project is its vision to make Bitcoin blockchain a smart contract compatible platform. While most of the blockchain networks that support smart contracts have programmable base layers, Stacks makes Bitcoin support smart contracts despite not having a programmable base layer. 

When it comes to all the layer2 crypto projects of Ethereum, they leverage Ethereum’s decentralization and security while enhancing scalability of it. But, in the case of Stacks, it leverages the much more robust security of the Bitcoin blockchain, while making it viable to dApps. 

Another feature of Stacks network that makes it stand out from the rest of the projects is its Proof-of-Transfer consensus mechanism. Even though the main focus of Stacks project is to bring smart contracts on to the Bitcoin blockchain, it doesn’t neglect scalability. By using micro blocks, Stacks processes more number of transactions per send, improving the scalability of Bitcoin. Additionally, it Clarity programming language is one of the distiguidhed laungague used so far in the blockchain industry. 

STX: Stacks Token

Stacks native token is called STX or Stacks coin, which was released in 2019. The company that was behind the development of Stacks project was initially known as Blockstack PBC, later changed its name to Hiro Systems PBC. It became the first-ever company to receive approval for selling STX tokens through an initial coin offering from the US Securities and Exchange Commission.

The total supply of STX tokens is capped at 1.818 billion and more than 1.443 billion tokens are in circulation as of February, 2024. Because of its close relation with the original cryptocurrency, Bitcoin, its price is often follows the trend of Bitcoin market price. When the Bitcoin price crossed the $57,000 mark after around 2 years, the Stacks price is also witnessing a spike in February 2024.

Adding to that, Stacks project is also witnessing a gradual yet signficant growth in its usage and adoption. This further contributes to the price surge of STX tokens. The total value locked (TVL) of the Stacks crypto skyrocketed in 2024, standing above the $144 million mark in February, 2024. You can buy STX tokens on various top crypto exchange platforms in a simple manner if your would like to get a hold of STX tokens. The top exchange platforms to buy stacks crypto are Binance, Coinbase, and OKX.