Stacks (STX) is one of these projects, and it’s already showing a lot of promise. The project has had tremendous growth since its introduction. In only a week, the value of STX has skyrocketed an incredible 160%.

So, what is Stacks (STX), and why has its value surged so much?

What is Stacks (STX)?

Stacks, or STX, is a blockchain project developed by Blockstack. Originally named Blockstack in 2019 but rebranded to Stacks in 2020, the project uses Bitcoin as its base layer. This cryptocurrency is designed to enable developers to build applications on Bitcoin without learning how to code on the blockchain directly.

Stacks aim to utilize the Bitcoin blockchain’s maximum power by introducing smart contracts and decentralized apps on its platform. The Stacks (STX) token is the powerhouse behind this platform and is the driving force for the execution of smart contracts, facilitating transactions and registering digital assets.

Stacks dApps are both open and modular, allowing developers to collaborate on top of each other’s applications. This helps in unlocking capabilities that couldn’t be achieved previously with other crypto projects. Furthermore, leveraging Bitcoin as its base-layer network allows all operations within the Stacks ecosystem access to the world’s most reliable blockchain security.

Like Bitcoin Wallets, Stacks also has a digital wallet called Stacks WalletStacks Wallet'>Stacks Wallet. With its unique features, users can manage their STX tokens as well as store other digital assets like Bitcoin and Ethereum.

What Gives Stacks Value?

Miners put forward BTC to create new Stacks (STX) tokens, while STX coin holders can accumulate tokens to acquire Bitcoin as compensation. It is too early to establish how bountiful this mining system will be for miners in the future, considering that it depends on numerous elements – primarily the comparative value of STX versus BTC.

The 2021 performance of STX has been remarkable. However, its long-term success depends on the Stacks platform’s acceptance and the continued expansion of Clarity-powered smart contracts. 

If growth plateaus, it could lead to a decrease in value that can be so severe as to discourage miners from exchanging BTC for Stacks tokens – which would have dire consequences. Without STX tokens, developers could not add their contracts onto the blockchain, nor will users have access to pay gas fees when running these agreements.

Ethereum’s native digital currency, ether (ETH), must be paid to execute any transaction on its platform; these fees are known as gas.

Why Has It Rallied This Year?

The Stacks network’s native cryptocurrency, STX, has seen an incredible surge in the last week and month, with a 160% and 180% increase, respectively (CoinGecko dataCoinGecko data'>CoinGecko data).

The surge in STX’s value can be attributed to the frenzy surrounding Bitcoin Ordinals. These are textual, video or image files inscribed into satoshis – the smallest denomination of a Bitcoin. Thus creating tokens similar to non-fungible tokens (NFTs).

Thanks to the Ordinal protocol, NFTs have debuted on Bitcoin. Consequently, these digital artifacts have garnered massive attention from the cryptocurrency industry. Data from Dune analytics reveal that just last month (Feb 27), there were more than 200,000 Bitcoin Inscriptions. 

Developers are competing to be the first to release tools that will assist users in creating Bitcoin NFTs. Gamma, a Stacks-based NFT marketplace, is one such platform offering an invaluable service; it enables its users to create Bitcoin Ordinals without any coding knowledge for a fee. 

Stacks’ trading volume has skyrocketed to a staggering 1,000 percent since last month due to Hiro wallet’s support for Bitcoin Ordinals on February 20. This widespread usage of protocols built on the Stacks network could drive up STX prices exponentially and will likely continue in the upcoming weeks too!

In March, the protocol is set for a significant upgrade known as Stacks 2.1. This update will further reinforce and optimize the connection between Bitcoin and the protocol.

This could be another factor driving up STX prices as the protocol’s adoption increases and more miners compete to earn rewards in Bitcoins. All these developments have enabled Stacks’ native token, STX, to become one of the most sought-after tokens on the market.

Conclusion

Stacks is an innovative project that merges Bitcoin’s security with the convenience of smart contracts and DApp capabilities. This integration with BTC and Ordinals protocol implementation has sent STX prices skyrocketing. 

The token stands to gain more from a potential upcoming upgrade. Nevertheless, it’s essential to remember that cryptocurrencies are volatile and can go against even the most optimistic trends. That said, always conduct your own research before investing an amount, and you need to prepared for a considerable loss. 

Currently, Stacks is trading at $0.8815 per unit – representing a remarkable surge of 16 percent this week and 316 percent since the beginning of 2022!

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