In summary
- After facing multiple delays, Bitcoin Stacks’ layer-2 network moved forward this week with the first part of its highly-anticipated Nakamoto upgrade.
- The Nakamoto upgrade, partially implemented in April, introduced mock-signed transactions using Stacks’ proof-of-transfer (POX) consensus.
- The full upgrade began rolling out last Wednesday and Stacks is expected to confirm transactions dramatically faster than before.
After facing multiple delays, Bitcoin Stacks’ layer-2 network moved forward this week with the first part of its highly-anticipated Nakamoto upgrade. The upgrade is expected to decouple block production from the Bitcoin Blockchain, allowing for faster and more efficient processing.
The Nakamoto upgrade, partially implemented in April, introduced simulated signature transactions using Stacks’ proof-of-transfer (POX) consensus, where miners burn BTC to earn STX rewards. Activation was delayed for eight weeks to focus on security and code audits, but the full upgrade finally began rolling out this past Wednesday. Once fully implemented, Stacks is expected to confirm transactions dramatically faster than before.
Muneeb Ali, co-founder of Stacks, spoke to Decrypt about the upgrade, the factors that contributed to the delay, the potential future of sBTC, and more.
“Now we can see the finish line,” Ali said. “And obviously some of the developers have been waiting for it for a while, so they’re very excited about it.”
Ali explained that although the software is already available, it will take a few weeks for everyone to update their systems. Then there will be a transition after two weeks.
“There’s a big process, we’ll have two weeks to update their software, and then one thing we really want to test is a transition of signers,” Ali said. “We’ll start these two-week cycles for these rewards, and we want to see a transition happen between cycle 92 and 93.”
The Nakamoto upgrade, which began its activation phase on Wednesday, will separate Stacks block production from the Bitcoin blockchain, resulting in a 120-fold increase in block production speed. As a result, confirmation times will be reduced from Bitcoin’s typical 10 minutes to just seconds.
“The best way I would describe it is that the final software is already available, (and) the rollout process is starting,” Ali said. “Everyone is updating now, for the next two or three weeks, and then things will go live.”
It’s been a busy two months for the Stacks Foundation. In July, the SEC closed an investigation into Stacks and original developer Hiro Systems, which had been ongoing since 2021. The investigation was launched despite claims by Stacks network contributors that their token sale had been “SEC-qualified.”
Regarding the SEC scrutiny, Ali said that the SEC had closely examined Stacks, asking numerous questions throughout the process, even though they had not violated any regulations. The lawsuit was eventually dropped, providing a significant boost to the project’s credibility.
“Years later, this gives a very solid foundation for the project that everything was done correctly,” Ali said. “Many say this makes STX a clear commodity like Bitcoin.”
There is now a big next step on the horizon for Stacks. If all goes well with the Nakamoto upgrade, then sBTC or Stacks Bitcoin will follow close behind, enabling new functionalities on the scaling network.
“For sBTC, the mainnet needs to be live first, but if everything goes well, then the path will be smooth,” Ali said. “So we just want to get the system live for a while, do some more testing, and then launch.”
Following the Nakamoto upgrade, sBTC will act as a Bitcoin equivalent within the Stacks network, allowing smart contracts and decentralized applications (dapps) to run with the same level of security and transaction finality as Bitcoin.
This means that users will be able to move Bitcoin to the Stacks network seamlessly. That should be a plus for the developers who have been gradually expanding and improving the network for years.
“We’re not throwing money at anything. There’s no incentive for developers to come, so it’s all organic. All the developers are building organically, all the users are organic,” he said. “I think that really helps the product stand out, it’s almost like a test of time. We’ve been consistently shipping very complicated systems.”
Building methodically and cautiously has given them a solid foundation, he added, assuring that the progress will likely be long-lasting as the network gains more functionality.
“Initially, people can get excited about something, but few can follow through,” Ali said. “So it’s something I’m proud of.”
Edited by Ryan Ozawa
Editor’s note: This story was updated after publication to remove a mention that Stacks developers were on hiatus, which was no longer the case.
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