The Stacks blockchain runs in parallel with the Bitcoin network and is anchored to the Bitcoin blockchain through a process called “stacking.” Stacks allow developers to build smart contracts on top of the Bitcoin network, thereby enabling new use cases and applications. The protocol was created by Blockstack, a blockchain-based platform for building decentralized applications (dApps). The Stacks protocol is a layer-2 solution that aims to provide a more scalable and decentralized network for Bitcoin. However, the Lightning Network has some limitations, including the need to lock up funds in payment channels and the inability to support smart contracts. The Lightning Network allows users to create payment channels that enable instant and low-cost transactions. One of the most popular layer-2 solutions for Bitcoin is the Lightning Network. To overcome this challenge, developers have been working on layer-2 solutions that can increase the network’s capacity without compromising its security. This constraint has resulted in slow transaction times and high fees during times of network congestion. This is due to the block size limit, which is set at 1 MB per block. The Bitcoin network, for instance, has a limited number of transactions it can process at any given time. They allow for faster and cheaper transactions while maintaining the security and decentralization of the underlying blockchain. These protocols help address issues such as scalability, speed, and cost-effectiveness. Layer-2 protocols are essentially additional layers built on top of the main blockchain that enhance its functionality. Understanding Layer-2 Protocolsīefore we dive into Stacks, it’s important to understand what layer-2 protocols are and why they are necessary. ![]() In this article, we will explore the reasons behind the popularity of Stacks as a layer-2 protocol for Bitcoin. One of the most popular layer-2 protocols for Bitcoin is the Stacks protocol, which can be accessed through an STX wallet. This has led to the emergence of various layer-2 protocols that aim to enhance the capabilities of the Bitcoin network. While the Bitcoin network has been successful in achieving this goal, it has faced several challenges, including scalability issues. “ Friend.Tech’s speculative nature,” writes Galaxy Research, “highlights ongoing questions over Coinbase's role in moderating a chain that today is ‘decentralized’ in name only.Bitcoin, the world’s first decentralized cryptocurrency, has been on a mission to revolutionize the way people think about money. One question is whether Base can retain the growth once this hot ball of money bounces to the next crypto craze. According to FundStrat, Base has accrued nearly $4 million in fees, $2.5 million of which is retained by Coinbase it works out to $30 million extra revenue on an annual basis. Friend.tech’s early success has helped drive up key metrics on the Base network, driving its total value locked (TVL) past $200 million and at one point pushing transactions per second above those of Ethereum as well as rival layer-2 projects Arbitrum and Optimism. ![]() ![]() 18 that it had scored seed funding earlier this year from the crypto-focused venture-capital firm Paradigm. Friend.tech, which allows users to purchase shares of X (Twitter) influencers, saw a rapid spike in activity (see chart above) after announcing on Aug. Its new Base project, a layer-2 network atop Ethereum, just launched this month, and already one of its new applications, Friend.tech, has gone viral, quickly attracting more than 100,000 users and generating more than $25 million in fees. crypto exchange, is getting a fast education, as one of the first big publicly traded companies to run its own blockchain. PRICE OF POPULARITY: Coinbase, the big U.S.
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