Blockstack 101: Stacks 2.0 and STX Tokens
Blockstack combines a decentralized identity system, domain name and a storage network put together to form the decentralized app platform. It is an open-source full-stack (comprising both the front end and the back end) decentralized computing network.
Blockstack PBC (Public Benefit Corporation) was founded in 2013 by Muneeb Ali and Ryan Shea. The corporation has raised roughly $75 million from venture capitalists and token sales. Reportedly, the co-founders also served as advisors for the popular Netflix series, ‘Silicon Valley.’
The source code of the Blockstack development is found on GitHub. The network uses the proof-of-work cryptocurrency of an established blockchain (presently Bitcoin) to secure a new blockchain.
Currently, there are 423 decentralized applications implemented on the network. These applications replicate some of the most popular and useful online apps like PDF readers, animation creator, file and password managers and so on.
It introduces the Blockstack browser which allows users and developers to access Decentralized Applications. One of the most important aspects of the browser is the creation of identity. The identity data of a user is entered once on the browser which enables access to all Apps. Moreover, it also allows users to send and receive Bitcoin.
There are two editions of the browser, the web edition and a client application. The web edition is for identity creation, funding and accessing the Dapps, while the client application is for advanced users and developers looking to make changes to or develop Dapps on the network.
The identity system enables a one-time log-in for applications through the browser. However, it personalizes the identity with the system and needs to be restored when using public systems. The blog post notes,
It is important to note that once you log into the application with the browser, your session does not expire until you choose Settings > RESET BROWSER.
Stacks 2.0 blockchain
In Q2 2020, Blockstack community will be upgrading the network to Stacks 2.0 via a ‘hard fork.’ Since 2015 an annual ‘hardfork’ has been performed which adds the upgrades and bug fixes on the network. The stacks 2.0 update is one of the most important updates until now, it will provide,
- Proof-of-transfer mining mechanism with Bitcoin
- Simple client verification
- Higher throughput
- Smart contracts, App specific tokens, and app chains
The launch of the Stacks 2.0 blockchain might be hampered due to the global lock-down because of the COVID-19 pandemic. The roadmap of their developments and updates on the launch can be viewed here.
Blockstack Tokens (STX)
The native token of the network is Blockstack (STX).
The token generation or security is linked directly to the Bitcoin blockchain via a new hashing protocol – PoX (Proof of Transfer). Proof of Transfer is a proposed design that uses Bitcoin’s Proof of Work (PoW) to launch new tokens.
The rewards in PoX protocol are distributed in the form of base cryptocurrency, rather than STX, in this case – Bitcoin. This provides greater incentives for miners than mining for the new cryptocurrency. For this implementation, it uses a PoS (Proof of Stake) in the background. The miners stake the native cryptocurrency of the network and in-turn are rewarded in the base PoW currency.
The network also rewards the participants, App developers and other contributors in the native token. Details of the update to the PoX mechanism to be implemented in the Stacks 2.0 blockchain is given here.
The initial token distribution began in Q4 (October) of 2019 when the Reg A, D and S tokens were distributed to its holders. Apart from the distribution to investors, Blockstack also performed two airdrops to distribute about $10 dollar worth $STX tokens to gold verified users of the Blockchain.com wallet. The tokens are subject to regulatory compliance and will be locked for a year on the wallet.
The total supply of STX tokens is capped at 2,048,913,388 STX (nearly 2 billion). The token distribution process began with an initial circulating supply of 321,731,995 STX (15.70% of the total supply). At press time, about 35 million tokens have been added to the ecosystem with 356,719,546 STX in circulation, with a total market capitalization of $31,688,779 (31.6 million USD). Currently, it is available only on the Binance exchange.