Stacks is marketed as enabling “DeFi, NFTs, apps, and smart contracts for Bitcoin.” It’s a blockchain that tries to share in some of Bitcoin’s security by writing blockheaders into the Bitcoin blockchain. The Stacks chain uses the STX token as its native token.
However, recently the chain has been struggling as users attempt to register names using the Blockchain Naming Service — which made us wonder, how well does this work?
Is Stacks as secure as they say?
Fundamentally, Stacks is connected to Bitcoin because the ‘miners’ who participate in the process of securing the Stacks blockchain write their block headers to the Bitcoin blockchain using OP_RETURN when they ‘commit’ their Bitcoin to mine. So, Stacks uses Bitcoin as an additional data availability layer, making it possible for someone who can access the Bitcoin blockchain to determine which Stacks blocks have been broadcast and built on.
What this practically enables is the ability to better recognize bad actors. It’s still possible for a change in the Stacks client to happen and for previous state to be declared invalid.
The marketing of Stacks repeatedly emphasizes the idea that it’s secured by Bitcoin, but that truly only means “as a way to store history.“
Is it “for Bitcoin?”
In order to use Bitcoin in most Stacks applications you need to first acquire xBTC — a wrapped form of bitcoin that was listed on OkCoin less than a year ago and now has zero 24h volume.
Currently if you have dollars or bitcoin and want xBTC, the easiest way to do that is to purchase STX on an exchange, transfer that STX to your wallet, then use a protocol like Alex to then swap your STX for xBTC. You can also acquire your STX by doing a submarine swap using a service like LN SWAP from Bitcoin.
In the future it hopes to be able to use atomic swaps to make it easier to onboard bitcoin into xBTC using something like the ‘Magic‘ protocol, to make it easier to swap…
