A Brief Introduction to Blockstack and the Concepts of Stacking and Proof of Transfer
This is the first article in what will become an educational series intended for entrepreneurs, investors, futurists, revolutionaries and those who simply want to stay informed on the latest blockchain developments. As the Blockstack project matures it will fundamentally change our experience of the internet for the better. In doing so there will be tremendous opportunities for individuals, businesses and even governments. I hope this article series will help to keep readers up to speed without being overly technical.
Blockstack is a project that aims to create a truly decentralized and open source Web, the way it was originally intended. Decentralized ledger technology, more commonly referred to as blockchain, has the potential to reshape the human experience as we know it providing more freedom, efficiency, individual control, privacy and transparency (yes you can achieve both of these things simultaneously). If you are reading this article you are no doubt already aware of this technology’s potential to disrupt just about every major industry in the world. If you’re like me, you think this is exciting but you may not understand how the underlying technology works. That’s OK. You don’t need a formal background in computer science, programming or mathematics to be a participant and early adopter, just like you don’t need to understand how your phone works to use it. Without further introduction let’s take a closer look at how Blockstack aims to change, well, everything.
At its core Blockstack is what I refer to as a leapfrog technology. It’s not trying to build something completely from scratch, it’s piggy-backing on an already existing technology to add new features and functionality. That technology is the Bitcoin blockchain, the most secure and decentralized network in existence today. The technology behind the world’s first cryptocurrency already has a substantial ecosystem of developers, investors, companies and other non-profit organizations and its growing at a break-neck speed. There are new blockchain projects popping up every day. This is fantastic because it’s tangible proof that so many entrepreneurs realize that not only is it not some fad that is on the way out, instead it is the future being built right in front of us. Most of the blockchain projects in existence today will ultimately fail. They may be around for another 5 years, maybe 10, but they won’t be here in 25 or 50 years. Bitcoin will still be here which is why it makes perfect sense to capitalize on it’s infrastructure.
Let’s take a closer look at “Stacking”, the concept of building on top of an already established chain. Why climb a mountain starting at the bottom when you can stand on the shoulders of giants? This is the core principal behind the concept of “Stacking”. Those looking to gain a competitive edge in the world of athletic performance often take a supplement stack. Put simply this means they are taking multiple supplements to derive the maximum benefit from each. You may build more muscle quickly by taking a creatine supplement. Taking a hemodilator with it allows you to work out harder and longer helping you to derive the maximum muscle building effects of creatine. The concept of stacking on a blockchain is basically the same. You are building another layer on top of an existing blockchain creating the potential for additional features while simultaneously benefiting from the underlying security, stability and value of the original blockchain. While this concept can be applied to any existing blockchain, it makes sense to build on top of the Bitcoin protocol for the reasons mentioned previously.
Blockstack aims to accomplish this by instituting a new form of validation called “Proof of Transfer” (PoX). PoX works by having miners compete by sending a transaction to approved recipient addresses which are visible to all participants in the network and simultaneous recorded on both chains, Blockstack and Bitcoin. By using this method to valid blocks and issue rewards to participants in the network you open up entry to participation to a much broader audience. To mine Bitcoin you need to use computing power and electricity (Proof of Work, PoW) to race against other miners to validate a block and reap the rewards. To do so with any amount of success would require a large upfront investment of time, money and knowledge. With PoX you need only a small amount of money, in the form of cryptocurrency, and a basic knowledge and understanding of how to send and receive transactions on a blockchain, i.e. public and private keys, witnesses, confirmations, blocks, etc.
PoX also provides other benefits over PoW or other forms of validation like staking (PoS) or proof of burn (PoB). One of the most notable, other than a much lower cost to participate in the network as a miner and receive rewards, is the ability to issue rewards in an established cryptocurrency, like Bitcoin, as opposed to issuing rewards in a new coin which might have a much lower and more volatile price… At this point you may be wondering exactly how these things are possible. We will delve more into the technical aspects of how the concepts of Stacking and Proof of Transfer actually work as this series of educational articles progresses. For now, what I hope readers gain from this article is simply an awareness of the Blockstack project and that the Web 3.0 is not something that is coming in 20 years. It’s an ecosystem that is currently being built and already has hundreds if not thousands of different applications. Like early investors and entrepreneurs of the original Web there is an opportunity to create great wealth and positive change. You must, however, be in the right place at the right time and be well informed.
To learn more about Blockstack on your own visit the organization’s official website – https://www.blockstack.org, read the white paper or check out this great YouTube video.