I’d like to post a series of articles under the name of “Crypto Classic”. It’s more like educating myself. But it could be helpful for some community members too.
Stacks (STX) is a cryptocurrency that operates on the Stacks blockchain, which is designed to bring smart contracts and decentralized applications (dApps) to the Bitcoin network. The Stacks blockchain uses a unique consensus mechanism called Proof of Transfer (PoX), which combines Proof of Work (PoW) from the Bitcoin blockchain with the “Stacking” function.
The STX token serves multiple purposes within the Stacks ecosystem. Firstly, it is used to participate in the consensus mechanism by locking STX tokens as collateral and stacking them to earn BTC rewards. Stackers, who participate in the stacking process, help secure the Stacks blockchain by effectively connecting it to the security of the Bitcoin blockchain.
Secondly, STX tokens are used to pay for transaction fees and contract execution on the Stacks blockchain. Developers can build dApps and create smart contracts using Clarity, a programming language specifically designed for secure and predictable execution on the Stacks blockchain.
The Stacks blockchain aims to enable a new generation of decentralized applications on Bitcoin while leveraging its security and network effects. By anchoring into the Bitcoin blockchain, Stacks offers a way to introduce programmability and smart contracts to the Bitcoin ecosystem, which traditionally focused solely on being a store of value.
