Stacks, a layer-2 blockchain designed to enhance the Bitcoin network, has officially commenced the Nakamoto upgrade, aiming to decouple its block production schedule from Bitcoin’s. This upgrade is set to make transactions faster and introduce new functionalities to the Stacks ecosystem.
Two-Week Window for Network Operators
Network operators have a two-week window to implement the Nakamoto upgrade. After this period, a hard fork will complete the upgrade process. The Nakamoto upgrade, named after Bitcoin’s pseudonymous creator Satoshi Nakamoto, introduces a new method for producing Stacks blocks through the proof-of-transfer (PoX) consensus algorithm.
Decoupling and Block Production
The Nakamoto upgrade decouples the Stacks block production schedule from Bitcoin’s, marking a significant shift in how the network operates. Under the PoX algorithm, users burn Bitcoin (BTC) to mine Stacks blocks and earn rewards. This process, which began implementation in April, involves “signers” coming online to validate “tenures” of transactions. Tenures are specific periods during which miners are responsible for producing multiple blocks that are ultimately settled on the Bitcoin blockchain.
Expanding Bitcoin’s Utility
Stacks is working to expand Bitcoin’s utility by introducing features such as smart contracts and decentralized finance (DeFi) functionalities, using Bitcoin as the foundational layer. As part of this effort, Stacks is also rolling out sBTC, a bridging asset that allows users to connect their BTC to the Stacks economy, further integrating Bitcoin into the Stacks ecosystem.
Market Response
The market has reacted to these developments with STX, the token used as fuel for the Stacks network and as a reward for miners, falling over 8% in the last 24 hours. This decline is part of a broader slump in the digital asset market, with the CoinDesk 20 Index down nearly 4%.
This upgrade marks a pivotal moment for Stacks, as it seeks to enhance Bitcoin’s functionality and introduce new possibilities for users and developers within the ecosystem.
