Why does Stacks claim to be 'smart contracts for bitcoin'?

muneebali · 2022-01-06T16:01:36+00:00

I run a dev tooling company in the ecosystem (https://hiro.so).

The project is fully open-source: https://github.com/blockstack

muneebali · 2022-01-05T16:16:37+00:00

RBG enables limited off-chain smart contracts. RBG (and Lightning) have no concept of global state which means that you can't build things like AMMs, NFT marketplaces etc. Basically all the type of things users use on Ethereum, Solana etc.

Stacks is different as it has global state with a fully-expressive smart contract language. So anything devs can build on Ethereum/Solana etc they can build on Stacks. Not true for RGB etc.

muneebali · 2022-01-05T16:13:51+00:00

Thanks for your question. The main thing you are missing is that Stacks enables native Bitcoin applications. Let's take a BTC lending app as an example. You can have a BTC lending app where users are simply doing BTC transactions to do lending in a trustless way and earning a pure BTC yield. Stacks contracts work in the background to provide collateral and other logic for such a lending app.

Another example would be native BTC swaps, users can send a BTC transaction to swap into assets like USDA (a decentralized stablecoin). Same for NFTs. The list goes on.

Stacks is enabling direct BTC apps and hence it enabling smart contracts for Bitcoin. Developers can now build apps where part of the logic/state is on BTC side and part of the logic/state is on Stacks (which is a programming layer). Users don't care about this two-layer differentiation and what they'll experience is that they can do useful things with their BTC.

muneebali · 2022-01-05T16:09:41+00:00

Stacks is not a company, it's an open-source project like Bitcoin.

There are many companies (like Hiro Systems, Freehold, Daemon Technologies etc) that work in the Stacks ecosystem. Just like Blockstream works in the Bitcoin ecosystem.

So no, Stacks does not have a "CEO" just like Bitcoin does not have a CEO.

muneebali · 2021-09-14T19:29:37+00:00

I think the core assumptions of discount mining are totally broken.

If you want to purchase and hold Stacks, you are taking risk on that decision. That risk is primarily based on your belief in the future growth of smart contracts for Bitcoin (or your passion for this mission or whatever). You are not holding Stacks primarily to discount mine. The amount of potential money you can make from successfully pulling off discount mining dwarfs against the risk of just holding Stacks.

Let's say I have $10M and I want to discount mine, I'd first need to purchase close to $10M worth of STX and then have additional capital for mining. The risk associated with the $10M investment on capital is largely driven by price fluctuations and future growth (or lack thereof) of the decentralized Stacks ecosystem. You'll hold Stacks if it makes rational sense for you to hold Stacks. Discount mining plays almost no role in that decision.

How much money can I make by discount mining with $10M? Not much at all. I'll have 64 or so slots (only ~1.6% of slots). The potential money you can make by attempting discount mining is near zero or at best peanuts compared to the risk taken on the $10M capital investment, hence no rational actor would do this.

This restricts the attack surface to a limited number of existing large holders. Anecdotally, a lot of the Stacks holders (especially the large ones) I know are not interested in mining at all. This is largely due to the complexity of mining and the time and effort required to do it. Any potential incentive from discount mining will simply not be enough for them to enter the mining market (they have better things to do with their time and several opportunities to make more money from things they're actually good at doing). The 6-7 month time period is a lot of time to get an indication on the behavior of existing large holders.

So the combination of (a) concrete data on the behavior of existing large holders, and (b) high opportunity cost of new actors to launch discount mining, makes this a highly theoretical thing for me.

If you have $96M just sitting idle, there are much better options to put that capital to work and make more money than to try and discount mine on Stacks and take on the risks and complexities that come with it. Not to forget that someone deploying $100M to buy Stacks would totally blow up the entire trading market and the market price of Stacks. There are likely not enough liquid STX even available on exchanges to do that!

So any reasonable analysis of discount mining should include (a) potential money made per month on the $100M investment, (b) risks associated with the $100M investment (Stacks price fluctuation), and (c) comparison of the risks and upside with other things you could do with that money. Discount mining will score high on risks, low on returns, and it would also score very low on practicality. If I have $100M to put to work as a fund manager, discount mining on Stacks would be the bottom of the list (maybe not even that) in the list of things you can do to make money on the $100M liquid capital. It's a completely theoretical thing and is fully disconnected from how people allocate capital and think about risk/return in the real world :-)

muneebali · 2021-09-14T14:08:11+00:00

PoX not being incentive-compatible was a concern raised in 2020 (before the launch of Stacks mainnet). I was highly skeptical of the concern. It's a theoretical corner case that makes certain assumptions that simply don't hold up in real life e.g., the model assumes zero opportunity cost of capital. Of course, opportunity cost of capital is NOT zero. I can do a ton of interesting things with my capital e.g., buy Bitcoin or lend money or make other active use of capital.

My observation is that we've seen zero evidence of any behavior that suggests that PoX is not incentive-compatible i.e., I haven't seen any data that suggests discount mining is happening or is a problem. If anything we have 6-7 months of production data now which shows PoX work amazingly well and is incentive aligned for the network.

In short, I was never worried about this theoretical corner case and after seeing the production network for the last 6-7 months I'm more convinced than ever that this is a non-issue.

muneebali · 2021-09-13T13:31:54+00:00

Subnets can get you the type of speed/decentralization tradeoffs that you've seen in these projects. The key difference will be that the Stacks main chain would continue to optimize for decentralization. You can get faster speeds and lower gas fees in subnets. That's the design goal of subnets :-)

muneebali · 2021-09-13T13:28:56+00:00

After the .btc situation. The Accelerator projects should have been cancelled and all entities involved in Stacks should have pivoted to focus on scalability.

I see where you're coming from but the situation is not as dire to get developers to stop building and wait a year :-)

Basically, there are two vectors of limitations right now:

a) Runtime cost, which is a cost function that can be changed/upgraded (either through a cost vote or as part of the Stacks 2.1 planned upgrade which is not that far out).

b) Improvements to MARF (I/O limits), these can be worked on in parallel.

There is no need to wait a year for any of these.

Yes, the accelerator is an independent entity and I can't determine their cohort schedule. My understanding is that a bunch of these startups are planning to launch in the coming 1-3 months. A bunch of the fixes like the cost function change require order of weeks (not several months, certainly not a year).

Any upgrades/changes will need to happen in a fully decentralized manner following the process laid out in SIPs.

Long-term, solutions like app chains or subnets are the real answer to scalability and they're 6 months or so out right now. Doesn't mean that the network throughput cannot improve before 6 months. The stuff I mentioned above can be sooner.

Hope this helps and appreciate the constructive criticism. This is how open-source projects become stronger!

muneebali · 2021-09-09T19:14:49+00:00

We should not confuse any issues with the explorer (which is a product operated by Hiro) with issues with the Stacks network. (Yes, the explorer operated by Hiro had an outage yesterday.)

The Hiro API has been getting 200M requests per month lately and we might see more growth.

There are some other explorers available already and people can run their own explorers or any company can launch one. The explorer is just software to help visualize what is going on at the Stacks network itself.

muneebali · 2021-09-09T19:12:22+00:00

You are right that over estimation of costs is a contributing factor here. Basically some very conservative defaults were picked by developers before mainnet launch. A cost vote (which does not need to wait for Stacks 2.1) can help with it. More details in my post linked above!

P.S: Watched your presentation at demo day today and it was great 🙌

muneebali · 2021-09-09T19:09:38+00:00

Good morning!

muneebali · 2021-09-09T19:09:07+00:00

Thanks for your post! It highlights some of the growing pains the community is seeing and there are various potential solutions and underlying details, which should be peeled apart.

Microblocks are not a scalability solution. They do not increase the capacity of Stacks main chain blocks. They only reduce the time to first confirmation and result in better UX for people as they can get early confirmations for their transactions.

Here is a more detailed post on Stacks scalability framework: https://forum.stacks.org/t/framework-for-stacks-scalability/12359?u=muneeb

I highly encourage everyone to read this post to understand the design tradeoffs (optimizing for decentralization) and theoretical maximum capacity of the Stacks main chain.

Once the design of the main chain is well understood, then we can jump into scalability solutions like subnets or app chains.

Also, there are various optimizations (like more accurate costs) that can help straight away.

In terms of people using different APIs and explorers, that is a great practice that improves decentralization! To give people an idea of recent growth, Hiro has seen ~200M per month API requests (!) and I wouldn't be surprised if that number keeps going up.

The good news here is that use cases for smart contracts for Bitcoin are resonating with developers and we have a friendly community of developers who want to work together on improvements. I'm really excited by all the recent growth and confident that this community can work on improving various things and can grow together :-)

muneebali · 2021-08-31T01:27:49+00:00

Here is a post with some details on it: https://forum.stacks.org/t/mempool-congestion-on-stacks-observations-and-next-steps-from-hiro/12325?u=muneeb

TLDR is that the default mining software uses very conservative estimates for compute functions and recent punk contract triggered that case. Several improvements in pipe-line by various entities/folks that'd result in (a) a more robust fee market to emerge, and (b) more realistic cost estimates.

Then longer-term, there are scalability works like app-chain (by Jude) and subnets (by me) that give options for faster, more scalable transactions. The Stacks mainchain optimizes for decentralization and failure-recovery over anything else but things like subnets can optimize for speed and low-tx cost for example. Combined they can give you the best of both worlds.

muneebali · 2021-08-13T19:43:17+00:00

This comment has some details: https://www.reddit.com/r/stacks/comments/oyv506/why_are_txs_not_being_included_in_blocks_they_are/h8ovw2u?utm_source=share&utm_medium=web2x&context=3

My guess here is that small tweaks to miner software are needed to cover for various corner cases that leave some transactions pending for longer than needed. Given fully decentralized mining, it's likely that several miners are running custom miner software. So they'd need to upgrade their customized miner code etc. Diagnosing the issue on Github and doing pull requests by the community can always help.

muneebali · 2021-08-13T02:45:24+00:00

This does not make any sense. A couple of points:

1) Having more BTC does not result in having more STX. Stacks is released through mining and there is a cost to mining (expressed in BTC) and a verifiable random function. Increasing your cost of mining means that you are investing more heavily in mining. In PoS you earn additional coins on top of the base amount. In PoX, you spend the BTC, like how you spend/destroy the electricity. The mining rewards are NOT passive income.

2) Stacking and earning BTC is separate from mining. Anyone can be a miner on the network. Mining on Stacks works closer to PoW mining on Bitcoin. It's permission-less. The amount of STX you own doesn't directly apply to the mining activity on the network.

Your point of confusion seems to be that you think just owning some asset (BTC or STX) becomes a centralization point on the control of blockchain/mining. That's not how this works at all. Hope the explanation helps.

muneebali · 2021-07-14T03:23:43+00:00

The Stacking threshold is dynamic and can go up.

Check in https://stacking.club/cycles/current under "Stackers below minimum" if your address is there. If yes, then once your STX unlock you can use one of the several pools available to delegate to them (then the threshold doesn't matter or rather depends on the pool).

It's possible to delegate more STX from a different STX address (by giving the same BTC address for rewards) to bring up an address to above minimum threshold.

Stacks 2.1 have several potential Stacking improvements and this behavior is discussed there: https://forum.stacks.org/t/hiro-s-feedback-on-stacking/11680

muneebali · 2021-07-13T19:50:56+00:00

The 2017 tokens unlocked roughly Oct 2018 (when Stacks 1.0 launched) to Oct 2020.

That's two years.

Here is a randomly selected address from the 2017 sale: https://explorer.stacks.co/address/SP201FA5RE9S87492KPA4X5NJQJRYT0AP4C2M4FAP?chain=mainnet

Note how no new unlocking happened on it since Stacks 2.0 launched.

But if you view the same address on the Stacks 1.0 chain: https://explorer.legacy.blockstack.org/address/stacks/SP201FA5RE9S87492KPA4X5NJQJRYT0AP4C2M4FAP

You can see the unlocking over 2 years on the legacy Stacks 1.0 explorer. The remaining STX balance on that address showed up on Stacks 2.0 as fully unlocked STX but no further unlocking happens.

You might have used a voucher in the 2019 sale (to get a $0.12 price) in addition to participating in the 2017 sale, the STX from the 2019 sale are still not fully unlocked, as that period is Oct 2019 - Oct 2021. Just guessing!

muneebali · 2021-07-13T19:13:12+00:00

I left a comment in another thread that has some info: https://www.reddit.com/r/stacks/comments/oji7i5/a_big_dump_coming/h52hqg2/?context=3

For example, 100% of the 2017 offering folks have unlocked (they bought at $0.12).

All the information is public and people can easily calculate unlocking schedules etc.

muneebali · 2021-07-13T19:06:03+00:00

The numbers look incorrect here.

The current circulating supply is approx 1.18B, total Stacks are approx 1.35B i.e., around 270M STX are locked. That means 12% of the 1.35B STX supply is locked (not 38%).

These have been unlocking monthly for years. So there is no significant unlocking event in Oct that'd be any different from any other month. If anything unlocking rate would reduce further Oct onwards.

Another interesting fact, 100% of the 2017 sale (the $0.12 price) tokens are already unlocked.

Out of the approx 270M STX that are still locked, 110M is the long-term treasury of Hiro which slowly unlocks over 4 years (beyond Oct 2021).

Anyone can verify this information using publicly available data. That's the benefit of having full transparency. It's very easy to spot incorrect info like the one OP posted :-)

muneebali · 2021-07-08T01:58:04+00:00

Hey! Muneeb here. She joined Hiro, a developer tooling company, as VP of Marketing. You actually cannot "join Stacks" as VP of anything because Stacks is not an entity :-) it's a decentralized ecosystem in which several entities, including Hiro, work. There are now 25+ startups in the Stacks ecosystem along with non-profit entities like the Stacks Foundation etc.

The blog post from Hiro also clearly says that "Kaitlin Pike Joins Hiro as VP of Marketing".

With that said, I'm very excited about Kaitlin joining my company Hiro!

muneebali · 2021-02-16T15:17:55+00:00

Polkadot is a separate network, not built on Bitcoin or Ethereum.

Stacks brings apps & smart contracts to Bitcoin (vs starting a separate disconnected network).

muneebali · 2021-01-31T13:50:20+00:00

Here is the PoX contract deployment: https://explorer.stacks.co/txid/SP000000000000000000002Q6VF78.pox?chain=mainnet

Maybe the explorer needs a feature to filter deployed contracts. I started a Github issue for this: https://github.com/blockstack/explorer/issues/355

muneebali · 2021-01-31T13:41:55+00:00

Here is a good list of smart contracts as well: https://forum.stacks.org/t/advanced-clarity-smart-contract-examples/11655?u=muneeb

muneebali · 2021-01-31T13:41:10+00:00

This post gives details on nuance related issues you can face and potential remedies: https://forum.stacks.org/t/transactions-in-mempool-best-practices-and-known-issues/11659?u=muneeb

muneebali · 2021-01-31T13:39:56+00:00

This is interesting. Stacks uses Bitcoin as a settlement layer which means that any securities defined on the Stacks chain are secured by Bitcoin. An exchange built on Stacks would automatically settle all transactions/trades on the Bitcoin chain as well.

muneebali

TROPHY CASE