Blockstack Proposes Using Bitcoin, Novel ‘Proof of Transfer’ To Accelerate A Truly User-Owned Web 3.0
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Blockstack, an open source blockchain project, with a 7,000-strong community, backed by more than $75 million in investment from the likes of Union Square Ventures, Y Combinator, Lux Capital, and Naval Ravikant – is proposing a new, novel mining algorithm called Proof of Transfer, or “PoX” which combined with the power of Bitcoin could enable a new set of possibilities for developers building a user-owned internet.
According to the co-founder of Blockstack Dr. Muneeb Ali in a recent blog post, there are many possible designs for a user-owned internet emerging on top of blockchains. Here are a few possibilities:
The user-owned internet is anchored in Bitcoin, the most secure blockchain.
The user-owned internet emerges around a DeFi ecosystem like Ethereum.
The user-owned internet is built on a new blockchain ecosystem specifically tailored for it.
He added in a press release:
“We believe that Bitcoin can become the flag of technology and most people will get introduced to crypto through Bitcoin. Bitcoin is already the king of proof-of-work (PoW), so by extending access and creating new ways to leverage the security and trust of the Bitcoin network, we’re activating the fundamental building blocks of a user-owned internet. In other words, Proof of Transfer allows everyone to benefit from Bitcoin’s security without needing to modify Bitcoin.”
If adopted as part of the new blockchain proposals comprising Stacks 2.0 expected later this year, developers, For the first time, would be able to use Proof of Transfer to launch new blockchains that are anchored in Bitcoin’s security.
Further, PoX can give incentives to earn Bitcoin rewards to participants of such new blockchains. Such Bitcoin rewards were not possible before PoX.
These rewards can potentially be used for use cases like consensus participation, ecosystem developer funds, and incentives for specific players.
Proof of Transfer is proposed as part of Blockstack’s anticipated new blockchain Stacks 2.0, which is slated to contain a number of key improvements to Stacks 1.0. Proof of Transfer itself generalizes the concept of proof-of-burn. PoX uses the proof-of-work cryptocurrency of an established blockchain to secure a new blockchain. However, unlike proof-of-burn, rather than burning the cryptocurrency, miners transfer the committed cryptocurrency to some other participant(s) in the network.
This allows network participants, who are adding value to the new cryptocurrency network, to earn a reward in a base cryptocurrency by actively participating in the consensus algorithm. PoX encourages a model where there is one extremely secure proof-of-work blockchain, in this case, Bitcoin. Other new blockchains are anchored on the secure PoW blockchain instead of having separate PoW chains.
According to the whitepaper released by Blockstack PBC and recent Stacks Improvement Proposals, Proof of Transfer would allow the Stacks 2.0 blockchain to (1) reap the security benefits of Bitcoin, (2) possibly reward Stacks (STX) holders for contributing to the network, (3) offer secure, predictable Clarity Smart Contracts and more expressive features without modifying Bitcoin’s core protocol, and (4) allow any project to spin up their own blockchain that has the security properties of Bitcoin.
Blockstack’s decentralized computing network already lets developers build secure, privacy-focused applications that ‘Can’t be Evil’ – putting users, not corporations, in control of their personal data. This Blockstack framework supports over 400 decentralized applications, including solutions for blogging, fundraising, and creative collaboration. Combined with Blockstack’s existing developer tools, Proof of Transfer can unlock the full potential and value of Bitcoin; setting the stage for true digital asset ownership and critical further innovation in Web 3.0
The company is no stranger to precedent-setting, and in 2019, it became the first company in U.S. history to receive SEC qualification for its digital token offering.
Stacks 2.0, which includes the proposals for Proof of Transfer is expected to be launched in Q2 of this year. If you would like to learn more about Stacks 2.0, please go here. and register to receive more information.
Blockstack PBC is the company behind Blockstack, the privacy-centric, decentralized computing network pioneering applications that return online data ownership to developers and consumers. Founded in 2013 and headquartered in New York City with offices in Hong Kong, Toronto, Barcelona and Washington state, Blockstack PBC is funded by Union Square Ventures, Y Combinator, Lux Capital, Digital Currency Group, Naval Ravikant and others. For more information, please visit blockstack.org.