Stacks (STX) Complete Guide - New Possibilities of Bitcoin Blockchain
Hello! Are you curious about Stacks (STX), which has recently been attracting attention in the cryptocurrency market? Stacks, which was born at the intersection of Bitcoin's stability and the innovation of smart contracts, is attracting the attention of many investors and developers. Today, we will explain everything about Stacks in detail so that even cryptocurrency beginners can easily understand.
Introducing Stacks (STX)
Stacks is not just a simple cryptocurrency. It is an innovative layer 1 blockchain platform designed to execute smart contracts on the Bitcoin blockchain. Many people know that ""smart contracts are impossible on Bitcoin,"" but Stacks overcomes these limitations and provides advanced features like Ethereum while maintaining the security and stability of Bitcoin.
STX, the native token of Stacks, plays a central role in this ecosystem. It is used for various purposes such as paying transaction fees, executing smart contracts, and participating in network governance, and its close interoperability with Bitcoin is a key point that differentiates it from other altcoins. Currently, many DeFi projects are being built on the Stacks platform, and its utility and value are increasing.
History and Development of Stacks
STX's journey dates back to 2013. At that time, the project started out as 'Blockstack' and focused on decentralized computing and decentralized app development. Founders Muneeb Ali and Ryan Shea wanted to solve the centralization problem of the internet and envision a new internet where users have full control of their data.
They made a splash in 2017 with their ICO and in 2019 they made headlines by conducting their first SEC-approved token sale. But the real turning point came in January 2021 with the launch of the Stacks 2.0 mainnet. This is when full integration with Bitcoin took place, and the Proof of Transfer (PoX) consensus mechanism was introduced, giving it its current form.
Interesting Fact: Stacks was the first token project to receive formal approval from the US SEC, making it a very advanced platform in terms of regulatory compliance.
How Stacks Works
The most unique feature of Stacks is its consensus algorithm called 'Proof of Transfer (PoX)'. It is a completely different approach from the existing Proof of Work or Proof of Stake, and is a genius idea that reuses the security of the already proven Bitcoin network.
In the PoX system, Stacks miners 'commit' Bitcoin instead of consuming electricity. When competing to create a new Stacks block, miners pay in Bitcoin, which is then distributed as a reward to holders who stack (stake) STX. This is a truly innovative structure that allows STX holders to earn Bitcoin profits simply by holding tokens.
Stacks also uses its own smart contract language called 'Clarity'. Unlike the existing Solidity, Clarity is designed as a Turing-incomplete language, ensuring predictable and safe smart contract execution. This allows the execution results of contracts to be predicted in advance, significantly reducing the risk of unexpected errors or hacking.
Various Use Cases of Stacks
The Stacks ecosystem is actively developing a surprising variety of projects. First, in the DeFi field, protocols such as ALEX, Arkadiko, and STX20 provide services such as lending, trading, and profit generation. In particular, the system that allows users to issue dollar-linked stablecoins using STX as collateral is very innovative.
Stacks also occupies a unique position in the NFT market. Based on the security of the Bitcoin network, NFTs provide differentiated value from NFTs on other chains. Stacks-based NFTs are actively traded on marketplaces such as Gamma and TRKLND, and are receiving particularly keen attention from the Bitcoin community.
BNS (Bitcoin Name System), a Web3 domain service, is also noteworthy. This allows users to use simple names (e.g. alice.btc) instead of complex wallet addresses, greatly improving the usability of cryptocurrency transactions. In addition, blockchain games such as Charisma and Megapont are being developed using the Stacks platform in the gaming industry.
STX Exchanges and How to Purchase
STX (STX) is currently actively traded on major exchanges around the world. Global exchanges include Binance, Coinbase, Kraken, Huobi, and OKX, and major domestic exchanges such as Upbit, Bithumb, and Coinone also handle STX.
There are some factors to consider when choosing an exchange. First, you should check the trading volume and liquidity. The higher the trading volume, the faster you can trade at the desired price. The fee structure is also important. It is recommended to compare maker and taker fees and choose an exchange that suits your trading style.
Trading Tips: After purchasing STX, we recommend that you do not store it in an exchange for a long time, but rather transfer it to a personal wallet and participate in stacking. This way, you can also receive Bitcoin rewards, so it's a win-win.
Active Stacks Community
Stacks has a very active and passionate community. The official Discord server is where developers, investors, and general users gather to share information and engage in discussions in real time. In addition, the project’s progress and roadmap are transparently disclosed through monthly community calls, gaining trust from community members.
The r/stacks community on Reddit is actively discussing a variety of topics, from technical questions to investment strategies. Twitter also shares the latest news and analysis centered around the hashtags #STX and #Bitcoin, and the developer community is particularly active in technical discussions related to new dApp development.
The Korean community is also growing. Stacks-related information is shared in Korean in KakaoTalk open chat rooms and Telegram groups, and regular online meetups are also held. These active community activities are a major driving force behind Stacks’ continued development and adoption.
Secure Stacks Wallet Management
Choosing the right wallet is crucial for safely storing and managing your Stacks. The most representative one is 'Hiro Wallet', which is officially supported by the Stacks Foundation. This wallet is provided in the form of a web extension, and you can conveniently use all the functions of the Stacks ecosystem, such as stacking, access to DeFi protocols, and NFT management, in addition to storing STX.
If you value security more, you can consider a hardware wallet. The Ledger hardware wallet supports Stacks and minimizes the risk of hacking by storing private keys offline. In particular, if you plan to store a large amount of STX for a long time, a hardware wallet is the safest choice.
When setting up a wallet, you must keep the backup seed phrase in a safe place. These 12 or 24 words are the only means of restoring the wallet, so it is recommended to keep multiple copies in a physically safe place. It is also important to regularly update your wallet software to apply the latest security patches.
Things to Know Before Investing in Stacks
Investment Warning: Cryptocurrency investment carries a high level of risk. You should conduct sufficient research and careful consideration before investing, and set an appropriate investment size considering your financial situation.
There are several important things to consider before investing in Stacks. First, you should understand the correlation with Bitcoin. Since Stacks is dependent on the Bitcoin network, Bitcoin price fluctuations and network conditions can directly affect the price of STX. Stacks tends to rise when Bitcoin is strong, but vice versa.
Second, you should be aware of the technical risks. Stacks is a relatively new technology, and many of its features are still in development. There may be technical risks such as smart contract bugs or network attacks, which may negatively affect the token value.
Third, changes in the regulatory environment should also be carefully monitored. Changes in cryptocurrency policies or the introduction of new regulations by each country's government can have a significant impact on the entire market. In particular, Stacks is a US-based project, so it may be more sensitive to regulatory changes in the US.
Lastly, you should clearly establish your investment strategy. If you are aiming for short-term investment, you should closely monitor technical analysis and market trends, and if you are considering long-term investment, you should focus on analyzing Stacks' technical roadmap and ecosystem development potential. It is also important to appropriately adjust the proportion of Stacks in your overall portfolio to diversify risks.
In conclusion
Stacks started with the innovative idea of implementing smart contracts on the Bitcoin network, and is currently building a solid ecosystem. It is very unique in that it provides modern blockchain functions while leveraging the security of Bitcoin through a unique consensus mechanism called Proof of Transfer.
However, as with all investments, Stacks investment also requires a careful approach. We recommend that you make investment decisions by comprehensively considering the technical development status of the project, the extent of ecosystem expansion, and market conditions. In particular, considering the high volatility of the cryptocurrency market, it is most important to invest within your risk tolerance.
It will be very interesting to watch how Stacks will develop in the future and what role it will play in the Bitcoin ecosystem. Stacks will continue to evolve along with the development of blockchain technology, and I think it is a wise investor's attitude to carefully observe and learn these changes.