This brutal crypto winter started with a lot of centralized players
consolidating power and then abusing it to serve their own Ponzi schemes.
I mean, purposes.
But even after all the FUD and fraud we've seen recently,
an old friend is bringing the fun back to Bitcoin
and might be just what we need to chase away those bear market blues
with some silly wizard magic to boot.
Let's get it!
Welcome to BitBoy Crypto!
My name is Ben.
Today, we're going to be trying to find out how Stacks stacks up.
Stacks, or Blockstack, has been around since 2018
and bill themselves as a layer 2 for Bitcoin
similar to the Lightning Network.
The Stacks blockchain runs in parallel with Bitcoin's blockchain
and allows NFTs, DeFi and other dApps to be built on Bitcoin.
In other words, they bring smart contracts and dApps to Bitcoin.
The Stacks token, or STX, is the native token of the Stacks blockchain.
As I said, Stacks has been around for a while,
but it wasn't until recently that the project really caught the spotlight.
The now famous Bitcoin ordinals community are closely tied to Stacks.
As a result of the attention these magical wizard friends have conjured,
the Stacks token has jumped over 250% from January to March of this year.
Those are some fat stacks for sure.
But since then, the ordinals mania has begun to wane somewhat,
and so has the price of STX.
Now, trading at just over 50¢ and sitting at No. 51 on CoinMarketCap.
And I'll let you guys know that we as a company do have a bag of Stacks in our portfolio.
And also I worked with Stacks in the past,
but this video is not paid promotion,
and the information here is for educational purposes only.
Stacks was originally founded under the name Blockstack in 2013
by Muneeb Ali and Ryan Shea,
a couple of computer scientists out of Princeton University.
The project came out of Muneeb's doctoral thesis,
which described a way to build a new version of the internet
centered around the Bitcoin blockchain.
Talk about visionary.
Blockstack is unique in the crypto space for one specific reason.
It went through all the SEC hoops of being registered as a security
for their ICO back in 2019, and they were the first to do so.
The Reg A+ sale of tokens to non-accredited investors was the first of its kind too.
But was the juice worth the squeeze?
Probably not.
Because just a year later,
Blockstack rebranded to Stacks in October of 2020
and SEC paperwork filings were no longer being processed by Hiro PBC,
the parent company of Stacks.
After all that song and dance, crypto and the SEC shenanigans,
STX is no longer a security as traded all over the world.
What a mess.
Just shows how corrupt things are in the United States government.
But the upside of this mess is the battles with the SEC are behind Stacks
for the foreseeable future,
and that is putting air under the wings of the token price recently.
More on that later.
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Okay. So enough history lessons.
Let's talk technicals.
And get comfortable because there are a lot of them.
Stacks uses a proof-of-transfer consensus mechanism.
This is a variation on their previous proof-of-burn, or PoB, mechanism.
With proof-of-burn, miners burn Bitcoin to get STX native token.
More Bitcoin they burn, more blocks they can mine.
However, in proof-of-transfer,
they transfer the Bitcoin to other users of the network instead of burning it.
Then a randomly selected miner gets to validate the block on the Stacks blockchain.
And voila!
Consensus in parallel with Bitcoin.
Just like nature intended.
The reward for validating is paid in STX.
And one randomly chosen STX token holder will receive the transferred Bitcoin.
In order to be eligible to get the Bitcoin, users must "stack" or stake their STX.
That's where we get the name Stacks.
Sorry, I know that was a long walk.
Stack is basically another name for staking STX.
Is that odiotic?
Well, Ody be the judge of that.
Now, if you know Bitcoin,
you know its block times are around 10 minutes.
A big problem for scaling.
But Stacks has a solution.
They have anchor blocks that are in line with the Bitcoin 10-minute output.
Stacks also has microblocks, which integrate into their normal blocks.
This makes Stacks more scalable.
It's complicated,
but the gist of it is they figured out a clever way to scale Bitcoin without totally sacrificing security,
an impressive technical feat to be sure.
Smart contracts on Stacks are written in Clarity.
Ironic.
A language developed in partnership with Algorand.
Smart contract data generated by the Stacks blockchain
and is stored off-chain in a decentralized data storage solution called Gaia.
Data is linked to a unique wallet address
and only the holder can give permission to access their data.
These guys really thought of everything.
There's a lot more technical info out there on the Stacks ecosystem
and what they have going on,
so if you're interested in mining or stacking on Stacks,
I encourage you to look into it for yourself.
There's a ton more to learn.
It's genuinely impressive what they've been building on Bitcoin.
Okay. That's how the fundamentals stack up.
Now, let's see if the pumpamentals pile high too.
Stacks blockchain's native STX token jumped from 20¢ to nearly $1.20 in February and March.
Thanks to hype around Bitcoin NFTs and an announced upgrade to the project.
The STX token dilutes at about 2.5% annually.
The inflation rate reduces after the Bitcoin halving,
which is expected in March 2024.
That's pretty low inflation compared to most other projects,
which is bullish.
It's also bullish to hit the like and the subscribe button.
So make sure to subscribe to the channel to stay in the know about crypto.
So, where does the roadmap go from here?
Well, the current strategy over at Stacks is to make Bitcoin ordinals more accessible to users
by facilitating minting processes and hosting user-friendly marketplaces.
Stacks Foundation, the team managing the blockchain,
on February 22, announced Stacks 2.1,
an upgrade to add EVM compatibility and synthetic Bitcoin
through a secure bridge to Bitcoin.
These could be huge and greatly expand what's possible to build on Stacks.
Can you imagine little wizards crossing a Bitcoin bridge
like a scene out of The Lord of the Rings?
Oh, I can feel the maxi rage already.
In addition to that,
the .btc naming service lives on the Stacks network.
And these could drive a lot of activity
if they catch on in the same way the Ethereum Name Service did on ETH.
A big drawback here though is that, for now at least,
users cannot send and receive Bitcoin at these .btc addresses
like they can with a .eth address.
Big adoption hurdle there.
Although we've seen a lot of hype this bear market,
we've had a whole heck of a hoot hanging out with the wizards trolling maxis,
I'm still not seeing a ton of organic activity on Stacks yet.
Only around 1,000 unique active wallets engaged with dApps on Stacks in February.
The most striking Stacks usage data point for me was that Gamma,
the leading NFT marketplace on Stacks,
had less than 100 wallets trading daily during the pump in February.
In their defense,
developers in the Stacks ecosystem, like the Xverse team,
are working on a wallet to bring user-friendly ordinal support.
They're also experimenting with atomic swaps between Bitcoin NFTs and STX.
But, so far, the results don't quite stack up to the tech.
The stacks jokes are really stacking up.
I chalk this up though to people losing interest in the bear market.
The real test for Stacks is going to be,
can they get everything ready in time for the next bull run?
And can they win market adoption once it comes?
Stacks is yet to deliver all the functionalities required to support NFT trading ecosystem
and it faces competition from projects.
Ordinex is developing an ordinals trading platform,
which will be accessible for Ethereum users through MetaMask.
OnChainBirds and SappySeals have also inscribed the NFTs on Bitcoin
and enabled trading on OpenSea.
None of these have gotten huge adoption either.
But my point is,
Stacks has competition coming in hot.
While Stacks enjoys a technical advantage,
Ethereum has a loyal user base and a huge liquidity
that can outperform Stacks' ecosystem if they can find a way to deliver.
Another concern I see is that there are still some barriers to entry for miners
and stackers on the Stacks network.
And it seems like it has resulted in a lot of big players leaving the network
and retail being reluctant to participate because they don't want to part
with their Bitcoin in exchange for an altcoin.
And I get why that's a valid concern that causes a lot of people to hesitate.
Remember the words of the almighty maxi Saylor.
"You do not sell your Bitcoin."
All these things are soft problems that Stacks will have to solve,
and they won't be able to code their way around market sentiment.
The next bull run will be their big chance
to realize their initial vision of an internet built on Bitcoin,
or it's even get passed by by other projects who just built better market fit.
Let me know down below in the comments what you believe about Stacks
and if you think it has what it takes to empty the internet honeypot
to bring magic internet money to the masses,
or if you think their impressive tech is going to get trampled
in the stampede in the next bull run.
That's all I got.
Be blessed.
BitBoy--
BitBoy out.