Blockchain startup Blockstack plans to burn Bitcoin by developing a blockchain dubbed start that is using the proof of burn (PoB) mechanism. The company made this known via a video published on January 23.
Stacks network to lavage Bitcoin network’s hashpower
According to Stacks lead developer Jude Nelson, Blockstack is currently developing its distributed ledger protocol called Stacks. This is a chain that makes use of the Bitcoin network’s hashpower and is secured by more than 45 exahash of distributed hashrate. The network will come with a consensus algorithm to burn BTC using a mechanism known as proof of burn (PoB).
Furthermore, Nelson explained that the network would use Bitcoin Core’s proof of work (PoW) and the PoB to process blocks on the Stacks chain. He pointed out that there are some issues with the proof-of-stake protocol, with the PoB protocol set to improve itself from established hash power stemming from the BTC chain. In the long run, the Stacks chain will slowly move away from BTC’s hashpower. However, using the BTC hashpower initially will help them prevent the 51% attacks that have been experienced with some networks recently.
Also, Nelson added that building on top of BTC’s security would be better instead of trying to copy its success. And, he explained that “Instead of expending electrical and hardware costs, participants in proof-of-burn consensus do just that — They provably destroy (or “burn”) their Bitcoin as the economic cost for their participation. Every participant competing for the opportunity to write the next block must burn a certain amount of proof-of-work token (Bitcoin) to enter the competition.”
Furthermore, the developer added that the probability of a participant winning the competition increases with the percentage of Bitcoin they burn compared to the other participants. “The competition’s winner writes the block, collects transaction fees, and earns the block reward of Stacks tokens,” he added.
Stack to build on top of the largest PoW chain
According to Nelson, Stack blockchain has its own memory-hard PoW process. However, only 5 percent of that memory is allocated, with the remaining 95 percent originating from BTC’s hash power. This process can be tweaked to ensure that Stack developers can reduce the dependency on the BTC chain later on. “As the Stacks blockchain starts to get significant hash power there is a path available (by changing the tunable threshold) to reduce the percentage for Bitcoin and slowly transition away from it,” Nelson mentioned.
Also, a Stack block is discovered by using the “cryptographic sortition” mechanism. Each block containing the burns from all participants is used to calculate a probability distribution at random. When a participant spends a lot of BTC during the burning process and doesn’t receive any incentive, then the loss is similar to a Bitcoin miner using electricity and losing the block race. Nelson stated that “If you contribute 90% of all burns in an epoch, there’s still a 10% chance that you will lose (but your Bitcoin is destroyed either way.)”
He explains further: “It’s worth noting though; the burns aren’t truly “wasted” — they still improve the chain quality since their (wasted) burns get used to calculate a “burn quota” which helps slow down attackers.”
And, the developer added that the company is developing the chain in this manner as they believe it wouldn’t make sense to compete with BTC’s security. Instead, the team is focused on building on top of the largest PoW chain to develop a more distributed and censorship-resistant web.
Blockstack has always been focused on achieving a more decentralized internet. Nelson added that it is better when there’s a blockchain network where individuals and organizations are in charge of verification. He revealed in Hong Kong that Stack version 2 is under development. At the moment though, developers are invited to review the two open SIPs or Stacks Improvement Proposals.