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Hi Abhijoy & Saurabh, we are glad to have you here today! Could you introduce yourself and Stacks?
Saurabh: I am an Electronics Engineer and an MBA from IIM Ranchi. I have a rich corporate experience of working with companies like Nokia and Reliance in senior management roles. Currently, I am running my own consultancy and also run a non-profit. I am involved in the marketing and community-building efforts of several projects and am a published writer on Hackernoon.
Abhijoy: I am an Electrical Engineer and did my MBA from IIM Ranchi with Saurabh. I have worked with Infosys, JP Morgan and Yes Bank. In 2017, I left corporate banking to become an entrepreneur. I run B2B SaaS startups by day.In the crypto space, I moderate communities for multiple projects and am also on the advisory board of a project. I also write occasionally on Hackernoon and Publish0x.
At Stacks, Saurabh and I are the Chapter Leads for India focused on evangelizing Bitcoin, Stacks, and smart contracts for Bitcoin in India.
About Stacks: Stacks is focused on making Bitcoin programmable by creating smart contracts for it. The Stacks blockchain enables secure smart contracts and decentralized apps (dApps) that run in parallel to Bitcoin and assume all its characteristics.
In doing so, it is bringing features like NFTs, DeFi, and more to Bitcoin which were previously not possible. Because Stacks is anchored to Bitcoin, all transactions and events on the Stacks blockchain are settled with finality on the Bitcoin blockchain. This is also the first SECqualified token offering which is a rarity in the crypto space.
About Stacks India: Stacks India is the Indian chapter of Stacks. We are a grassroots community, building the local ecosystem for Stacks. The community includes coders, smart contract developers, token holders and very soon, NFT artists as well.
Q1. Why is Stacks built on Bitcoin and not on Ethereum network, which is kind of preferable these days?
Stacks chooses to be built on top of the most secure chain. This does not mean that we are blind to the developments of Ethereum or other chains. But at a base layer, Stacks wants to inherit the properties of Bitcoin. Plus, Stacks is a Layer 1 chain with its own consensus, unique properties, and events that would not be possible for tokens or sidechains.
Q2. Since Bitcoin is minimal by design and is not meant to change, how can Stacks 2.0 adapt this blockchain to new feature to survive in a competitive and ever-changing crypto-space?
The beauty of Bitcoin is in its simplicity and often, resistance to frequent change. This has made it robust and the most secure chain over the years. Major Bitcoin Improvement Proposals (BIP) are achieved only after review and consensus from the community.
For example, if you remember, the consensus for Taproot upgrade had to be reached based on support signals from miners which took quite some time to happen. Now combine that level of security with a relatively younger chain like Stacks which has more flexibility in terms of new stuff happening in crypto.
Stacks has read-access to Bitcoin, it can react to changes on BTC while not affecting the BTC chain’s inherent nature. So Stacks can anchor itself to Bitcoin and build things like DeFi, NFTs, and smart contracts on top of it and at the same time inherit all of the properties of BTC without major change to the base or anchor chain.
Q3. Is it possible to build apps and smart contracts on Bitcoin since it is a slow blockchain?
Stacks is a Layer 1 blockchain since there is no merge-mining to eventually broadcast transactions to the base chain. Events on Stacks chain are unique and do not need to be merged into the anchor chain. The reason Bitcoin was chosen to be the anchor is because it is the most secure blockchain of all in terms of hash rate. It has stood the test of time with numerous forks and attacks. Bitcoin is like a trillion-dollar Fort Knox right now. With Stacks, you get the security of Bitcoin. So to attack Stacks, you would have to attack Bitcoin.
You are partly correct when you say slow (~10 minutes for a block confirmation). But you will have to consider the blockchain trilemma when saying that; what do you compromise on when achieving speed. Do you reduce decentralization or do you decrease security? Stacks has chosen Bitcoin’s security and decentralization over some other chain’s supposed throughput.
Having said that, Stacks has already started implementing microblocks and the transactions are processed at a lightning speed. Think Lightning Network for Bitcoin. Microblocks does the same for Stacks. BTC blocks are used as anchors for block writing and give transactions secure finality. While microblocks give fast confirmations.
Q4. How are Stacks microblocks different from the normal blocks?
Microblocks are like components of a Stacks block. So if you are doing a transaction, it can get instantly confirmed in a microblock. Many microblocks together make up a Stacks block which are anchored to Bitcoin blocks. So while a microblock gives fast confirmation, Stacks block gives finality to confirmation. So you can do merchant transactions quickly with microblocks while at the same time getting secure finalization in 10 minutes when its corresponding Stacks (or Bitcoin) block confirms.
I will share two resources here to read up in case anyone wants to explore:
Q5. Why Stacks uses Proof of Transfer (PoX) consensus? Since PoX reuses already minted bitcoins, can we say this is more environmentally friendly in terms of energy conservation compared to PoW?
To begin with, Bitcoin uses Proof-of-Work (PoW) which requires spending energy which is kind of an unbiased, freely available resource for all. Given enough time, everyone can spend energy to have a slice of the Bitcoin pie (keyword is, enough time). Because, the race is on for the best ROI, miners naturally shift towards freely available energy like renewable sources of energy. So Bitcoin incentivizes green energy usage.
The genius of the Stacks consensus mechanism (PoX) is that we are reusing the PoW consensus without any additional energy expense. So you are right in saying that Stacks is not adding up on the energy usage for achieving consensus since it already uses Bitcoin’s finality. PoX is a way to exchange value between miners and stackers of Stacks and runs on top of Bitcoin’s PoW.
Q6. How is STX PoW combined with the proof of transfer on the Stacks chain?
I will take a little inspiration from Marvin Janssen, Technical Lead at Stacks Foundation, explanation on this.
Stacks protocol is based on Proof of Transfer (PoX). It’s a Layer 1 blockchain that uses the BTC chain for finality. So BTC’s PoW is also utilized in the consensus.
PoX has two sides: The stackers and the miners.
1. Stackers: They lock up their STX tokens, and by doing so, vote on what they think is the canonical chain tip. Together with their vote, they broadcast a reward address of the base chain, which is Bitcoin.
2. Miners: They commit base tokens (BTC) to the network in order to bid to become the next leader, the more BTC a miner commits, the higher the odds they will become the next leader. The leader produces the next Stacks block and thus receives the STX coinbase reward. They get a portion of new STX tokens, the BTC they spent is sent to the reward addresses of the miners.
The consensus mechanism uses a VRF (Verifiable Random Function) to select the next BTC reward address to pay. So that means if someone is stacking, they will receive BTC rewards at some point of the stacking cycle because of the fair distribution of a VRF.
Q7. What is the exact use case of Stacks? Will the apps built on Stacks inherit Bitcoin’s power?
Well, this is an easy one: Use-cases are numerous and opportunities limitless! Think Bitcoin but with smart contracts on top. It’s BTC on super steroids!
With STX, DeFi on Bitcoin is possible. It brings all the features like NFTs and more to Bitcoin. Since STX runs parallel to BTC, the apps and smart contracts on STX are in effect secured by the Bitcoin blockchain. All transactions are anchored to Bitcoin blocks.
One practical real-life application is STX tokens such as MiamiCoin ($MIA). It’s a City Coin, where rewards from the community stacking pool are distributed to the local municipal corporation for public service. People can mine MIA by committing STX (miners) or they can stack MIA to earn STX rewards (stackers). So, PoX, but for MIA.
Q8. Is Stacks considering to step into the NFT space?
Yes definitely, many projects have already been launched on STX. These include PFP type NFTs, 1/1 art pieces, visualizers, wallet support integrations, and marketplaces. We have a lot of interest from the NFT community to build NFT’s on top of Bitcoin.
Some projects that have gone live on Stacks are Risidio, This is #1, Phases of Satoshi and Punks on Stacks.
An interesting upcoming project from India that we are incubating is namastepunks.btc. Boom Wallet already supports minting, visualizing and transferring NFTs. A project called HeyLayer is building a storefront deployer for NFT’s. This is not all-inclusive. I doubt if it will be possible to cover everything happening in Stacks in a single picture, to be honest.
Here’s a small snapshot of the Stacks ecosystem map: https://twitter.com/Stacks/status/1436364674572840968
Q9. What is $STX stand on DeFi ?
Stacks is bringing all the cool and fun stuff for cryptos on top of Bitcoin. And this includes DeFi as well. The very concept of stacking is a derivative of DeFi if you think about it: stack STX and earn BTC. There are not many assets that have BTC yielding properties in-built in its protocol. Most BTC yields are done synthetically or manually but Stacks does this by its inherent nature.
There are numerous teams building DeFi products on Stacks. The first cohort of startups from the Stacks Accelerator had their demo day last week where they presented their solutions to a panel of investors and thought leaders like Meltem Demirors, Anthony Pompliano, etc. On the top of my head, two names that are making DeFi products on Stacks are Arkadiko Finance and Alex.
Q10. Can you tell us about any new upcoming partnerships? Your whitepaper mentions a few names like Hiro, New Internet Labs, Daemon Technologies, etc; are all these partners of Stacks?
The names you mentioned are all key parts of the Stacks ecosystem. Hiro builds infrastructure and development tools for Stacks. So, many of the things you see like Stacks wallet, Clarity Tools, etc. are made by Hiro. It is spearheaded by Diwaker Gupta who is an IIT Kanpur alumnus and now works as VP of Tech at Hiro. Daemon Technologies is working on mining and stacking infrastructure for Stacks and is focused on Asia. New Internet Labs is an early partner led by one of the earliest supporters of STX, Larry Salibra.
Some of the most notable recent partnerships are Coinbase Custody and Chainlink. The Stacks India crew has been working on an ecosystem model for a while but we keep losing track every week since new names keep adding up every few days.
I don’t think it will be prudent to comment on future partnerships unless they are finalized. But we do have a vibrant partnership ecosystem already. You can get a gist of it from our website https://www.stacks.co/
Q11. Do you guys feel satisfied by seeing your progress and achievements till now when you look back to the day when you have started this project?
A lot has been done already. More work to be done still. Our partnership growth and the number of startups in the Stacks Accelerator are a testament to that.
Q12. BTC got approved as a legal tender by El Salvador. What are your thoughts on it? Also, as the project states that it makes Bitcoin programmable, more useful, and scalable; what do you think you could provide more to the table if we are in a similar scenario?
Yes, the El Salvador news is very promising and gives everybody in the crypto space a lot of hope. We believe, making Bitcoin programmable is the logical next step. Smart contracts on top of sound money.
Q13. What is your main vision behind STX and what key features are you developing?
We are building Stacks’ Indian ecosystem. Our aim is to send many projects to Stacks.ac accelerator program. DM us if you are a coder, smart contract developer, or crypto intrigues you!
Q14. What is Namaste punks?
It is an NFT project. Details will be shared soon, keep checking Stacks India Telegram channel: https://t.me/StacksIndia
Q15. Currently, NFT is very hot, do you think you will apply NFT technology to your products in the future?
Absolutely yes. You will find our responses on NFTs above.
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