What is Stacks?

The purpose of Stacks is to enable smart contracts and decentralized applications on the Bitcoin blockchain, providing a more agile execution layer. The project aims to solve concerns around internet privacy, security, and data breaches. Potential use cases and applications of the technology include decentralized payment structures, DAOs, DeFi applications, decentralized exchanges, multisig wallets, and Bitcoin-backed synthetic dollar protocols.

Stacks is a blockchain platform that uses a unique consensus mechanism and publishes proof of transactions on the Bitcoin network. It has its own token, which acts as an incentive mechanism to maintain a historical ledger of all of its transactions and operate with its own security budget. The Stacks network runs an autonomous state machine and consensus mechanism, extending the Bitcoin network by developing a more agile execution layer.

Stacks differentiates itself from competitors by being a layer 2 blockchain anchored to the Bitcoin network, providing the security and properties of the Bitcoin network. Its competitive advantages include its ability to utilize Bitcoin as a foundational settlement layer, making it a productive asset in a decentralized way. Compared to other Bitcoin layers like Lightning, Stacks has real utility in serving as a way to utilize Bitcoin and make it a productive asset in a decentralized way.