EXCLUSIVE: Building On Top Of Bitcoin May Not Be As Popular As Ethereum, Other Blockchains, But We're 'Close To Seeing Some Runaway Success,' Says Stacks
Stacks (STX) aims to bring smart contracts and decentralized applications, or DApps, to Bitcoin (CRYPTO: BTC). An attractive facet for some is the ability to earn BTC earning through a mechanism the project calls “Stacking.” Mitchell Cuevas, Head of Growth at the Stacks Foundation sheds light on building on Bitcoin blockchain and other aspects of Stacks.
From Lump Of Gold To Active Asset: “Stacks turns Bitcoin from being a passive asset into an active asset that is programmable and available to all,” said Cuevas.
Dismissing the ongoing narrative that deifies Bitcoin as “digital gold” or as a store of value, Cuevas says such an understanding persists “because it’s easier for people to assign analogies and comparisons.”
“That paradigm seems to be shifting already as leaders in the space continue to argue that Bitcoin is, in fact, 'not a rock' like gold is, but a powerful, programmable technology, with a market worth over $1 trillion,” said Cuevas.
Cuevas says that Satoshi Nakamoto — the pseudonymous creator of Bitcoin — themselves did not limit the vision of the apex cryptocurrency as a “store of value.”
He said instead Nakamoto believed that new apps and chains would share Bitcoin’s computing power.
Dealing With Roadblocks: Building on Bitcoin faces challenges that are evolving with time, as per Cuevas. A year ago tooling would have been a considerable challenge, but today, awareness and Bitcoin’s PR problem are the latest impediments.
Cuevas told Benzinga that while a “ton of great experimentation” and activity is taking place on Ethereum (CRYPTO: ETH) or EVM-based chains because of familiarity with networks, developers are also increasingly aware of similar possibilities on Bitcoin. “Many will look at some of the advantages of building there and you’ll see the activity grow.”
On the ongoing energy debate, brought into the public consciousness and the news reports by Tesla Inc (NASDAQ:TSLA) stopping BTC payments, Cuevas said it was “oversimplified and blown out of proportion.”
“No one wants to feel like they’re contributing to something that is bad for the environment. So, the community certainly needs to deal with that and there are several good efforts to that end,” said Cuevas.
Battle-Tested Technology: Despite the bad rap on the environment, Stacks plans to stick to Bitcoin because it is the “most secure, most battle-tested blockchain available.” Cuevas said that Stacks actually reuses electricity already burned to secure Bitcoin.
Referring to the Proof of Transfer (PoX) mining mechanism used by Stacks, Cuevas said Stacks approached the environmental concerns by efficiently using resources made available by Bitcoin’s network.
He said Stacks mainly operates by “recycling the energy to be reused to secure our chain and chains on top of Stacks without the need to run [Proof of Work] again.”
Proof of Work is the mining mechanism used by Bitcoin that requires solving complex mathematical puzzles, which in turn require power-hungry computing resources.
See Also: Proof Of Stake Vs Proof Of Work
Cuevas pointed out that PoX can work with other blockchains as well and if there was a better option than Bitcoin for a settlement layer “chains could migrate accordingly.” “That said, we don’t see that as being very likely.”
Why Stacking Is Bae: Stacks users can lock up their STX and earn BTC in a process calling Stacking. This according to Cuevas has received a great reaction.
“We have surpassed $330M in [Total Value Locked] for Stacking, which puts us in the Top 25 in terms of TVL for DeFi projects at just about 5 months in,” said Cuevas.
At press time, STX traded 4.79% lower at $0.90 over 24 hours. The cryptocurrency traded 0.86% lower against Bitcoin (BTC). BTC traded 3.77% lower at $38,774.15 in the same time frame.
Since the year began, STX has soared 125%. Stacks TVL at press time was $350.21 million, as per CoinMarketCap data.
Cuevas revealed that new Stacking providers have come online and they are starting to see the first wave of businesses start to experiment with integrating Stacking into their business models.
Benzinga asked Cuevas if high Bitcoin fees were a barrier to Stacking, to which he replied, “We haven’t seen it yet, at over 10% APY, the yield is so good I don’t think it’s been a problem. We’re also working on some improvements in how Stacking pays out to reduce fees in the future.”
Popular Like A K-Pop Idol? In April, OkCoin Chief Operating Officer Jason Lau told Benzinga that STX doubled in value less than 24-hours after it became available to trade on a South Korean exchange.
The credit for the popularity goes to local community management and tight regulations in Korea, as per Cuevas.
“Stacks is the only asset to execute a Reg A sale with qualification from the SEC and has been transparent and careful throughout its journey. We believe this has made STX especially attractive to this local market.”
Cuevas disclosed that Paycoin, a cryptocurrency platform, also integrated STX, thus allowing locals to use the cryptocurrency at vendors like 7-Eleven, KFC, Domino’s Pizza, and others.
Making It Simple: Despite the learning curve involved in dealing with cryptocurrencies, Cuevas is hopeful that familiar interfaces such as wallets and web browsers can make it easier for the average person to use Stacks.
“As far as the STX economy and Stacking, right now you can jump on Okcoin and go from having no STX to Stacking in a few clicks,” said Cuevas.
“One of our priorities is increasing STX token access around the world so we are supporting integrations and infrastructure for Stacks that make it easier for people to interact with everything the network has to offer and participate in a way that makes sense and provides them with value.”
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