Today’s Stacks price surge has outperformed most altcoins. It was ranked at position four by CoinMarketCap among today’s top gainers behind Render Token (RNDR), Conflux (CFX), and Injective (INJ), in that order.
STX price seems to mirror Bitcoin price which just surged above $30,000 earlier today. The spark in value has caught many crypto investors by surprise and most are wondering whether Stacks is poised to become the next big thing in the crypto space especially since it has been performing so well since the beginning of the year.
Well, the Stacks and Bitcoin are two different blockchains with different native tokens. However, they are related in a way.
Stacks is a Bitcoin Layer for smart contracts. It allows smart contracts and decentralized applications to use Bitcoin as an asset and settle transactions on the Bitcoin blockchain.
Stacks normally has full knowledge of the full Bitcoin state because of its Proof of Transfer consensus and Clarity Language that allows it to read from the Bitcoin blockchain at any time. That alone provides some insight as to why the price of STX is closely correlated to that of BTC.
All the transactions made on Stacks are automatically hashed and settled on the Bitcoin Layer 1 blockchain. In essence, Stacks blocks are 100% secured by Bitcoin hashpower meaning for an attacker to re-order Stacks blocks or transactions, the attacker would have to re-order Bitcoin blocks.
In addition to being linked to Bitcoin, Stacks is a scalable layer meaning transactions are settled more quickly compared to Bitcoin transactions, making it a go-to option for crypto investors using BTC to settle transactions.
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