<\/p>\n
The network is \u201ctransforming into a true Layer-2\u201d said Rena Shah of Trust Machines.<\/p>\n
Stacks, Bitcoin\u2019s largest Layer 2 by market capitalization, is gearing up for its biggest hard fork: the Nakamoto upgrade.<\/p>\n
\u201cStacks is transforming into a true L2,\u201d said Rena Shah, VP of Bitcoin products at Trust Machines, a company that has been backing and building on Stacks for years.<\/p>\n
The Nakamoto upgrade brings a solution expected to reduce Stacks\u2019 block times to five to 10 seconds, from the current 10 minute confirmations it inherits from Bitcoin.<\/p>\n
Stacks has been on a tear in recent months. The STX token, which has $3.9 billion in market cap, is up 250% in the past year, now trading for $2.71.<\/p>\n Stacks is looking to capitalize on Bitcoin\u2019s recent renaissance.<\/p>\n \u201cBitcoin season 2 will be all about users finally separating BTC the asset from Bitcoin as rails,\u201d said Muneeb Ali, co-creator of Stacks. \u201cBitcoin scaling layers of all kinds stand to benefit [from Ordinals] as developer awareness around these protocols grows and the demand from users for faster, cheaper, and more secure experiences that are native or close to Bitcoin rises.\u201d<\/p>\n Brought on by Ordinals<\/a>, which has set off a chain of new users and development, Bitcoin\u2019s Layer 2 ecosystem is kicking off<\/a>, as the oldest blockchain in the industry finally makes moves after years of stagnation.<\/p>\n Launched in October 2018, Stacks stores a hashed copy of transactions on Bitcoin\u2019s blockchain, rewarding users who lock their STX in the network, known as \u201cstackers.\u201d Stacks pays stackers with direct payments in BTC while rewarding \u201cminers\u201d who sacrifice their BTC with freshly minted STX.<\/p>\n For Shah, a \u201ctrue L2\u201d depends ultimately on how to lock assets from L1 to L2s. The peg mechanism, she said, is very important.<\/p>\n Stacks will decouple its blocks from Bitcoin\u2019s so that a Stacks miner can produce multiple blocks within a specific time period. The upgrade will also protect the blockchain against \u201creorgs\u201d (this occurs when node operators replace a block because a longer chain has been created) by connecting Stacks forking framework directly to Bitcoin.<\/p>\n Why does this all matter? According to Shah, it\u2019s all about finality.<\/p>\n Stacks is \u201crecycling\u201d Bitcoin finality, she said, which is ultimately the most important part of the network.<\/p>\n Ali agreed with Shah. \u201cThe Nakamoto activation advances the Stacks ecosystem to a system that not only matches the security prospects of Stacks transactions to that of Bitcoin\u2019s full finality.\u201d<\/p>\n Lots has been said of Bitcoin\u2019s store of value<\/a> property, but with a sluggish adoption of the Lightning Network, high transaction fees, and slow block times, payments have lagged.<\/p>\n Shah explained that Bitcoin\u2019s medium of exchange phase is in its early innings, but now Stacks might finally help make the progression.<\/p>\n Taking Bitcoin from investment hedge or \u201cfreedom money\u201d and into more DeFi-friendly use cases is a \u201cnatural progression for an asset class that has been here for a while,\u201d Shah said.<\/p>\n She pointed to Bitcoin\u2019s $1.3 trillion market cap<\/a> that is locked in, and how that could be put to better use.<\/p>\n \u201cImagine what would\u2019ve happened if that trillion got put to work in Ondo<\/a> or Ethena<\/a>,\u201d she asked. Stack\u2019s upgrade is a monumental step into making DeFi a Bitcoin reality, Shah added.<\/p>\n Stacks is taking a slightly different approach than much of rest of the crypto industry.<\/p>\n It won\u2019t be compatible with Ethereum’s Virtual Machine (EVM), as is the case with Rootstock. Instead, Stacks will seek to integrate alternative networks in the crypto ecosystem. According to Shah, these include Near Protocol<\/a>, Solana<\/a>, and Aptos<\/a>, at least to start off with.<\/p>\nBitcoin Renaissance<\/h2>\n
What Is The Nakamoto Upgrade?<\/strong><\/h2>\n
Bitcoin as Medium of Exchange<\/strong><\/h2>\n
Not EVM-Compatible<\/strong><\/h2>\n