Stacks & STX token Potential — Can it 100x ?

The Stacks team has been working like mad to convince the sec to change its classification of the STX token from a security to a currency now that stacks 2.0 is live. While it wasn’t clear to me why stacks and hydro systems had rebranded in October. This makes a lot of sense when you consider the fact that this rebrand makes it easier for STX to be classified as a currency.

A green light from the SEC seems to be the only thing preventing the buildup of institutional clients and investors in the United States from using Stacks and STX. Everything else already seems to be in place, case in point, Coinbase already provides custody for the STX token and multiple US exchanges have signaled their readiness to list STX once it’s cleared by the SEC. Hiro Systems recently filed its final annual report with the SEC and has stated that it will no longer handle the STX token as a security. Now whether the SEC feels the same way remains to be seen, but once these floodgates are opened, the adoption could be unprecedented.

For starters, Stacks is built around a cryptocurrency that is seeing massive adoption by institutions and investors. Stacks already has hundreds of apps for things like decentralised video streaming, accounting, and health record sharing. Most importantly institutions can trust the project because it was built in the United States, by people from one of the world’s top universities who held a token sale sanctioned by regulators.

According to Stacks founder, Muneeb Ali, the real value that Stacks will bring is sustainability to the Bitcoin blockchain. In 100 years or fewer, the last BTC will be mined. Now many have argued that transaction fees alone will be enough of an economic incentive to keep the Bitcoin network going after that point.

However, the fees for these transactions would need to be large and the transactions would need to be frequent. If fees are large, there will be fewer transactions and this would create a negative feedback loop that could kill Bitcoin. Muneeb argues that large and frequent transactions on the Bitcoin blockchain is exactly what the Stacks ecosystem will incentivise through its mining process.

If he’s correct, then Stacks might actually be what Bitcoin needs to maintain long-term security well into the future.

Disclaimer: this is not financial advice.