Last week, the Blockstack team formally rolled out their proposal for a new mining mechanism for the Stacks blockchain called Proof of Transfer (PoX). In addition to the blog post, you can read the full PoX white paper and the Stacks Improvement Proposal (SIP-007) that details the idea.
PoX is a way of building new blockchains on top of existing Proof-of-Work blockchains like Bitcoin. The Stacks blockchain has always been built on top of Bitcoin, but has thus far used a proof-of-burn (PoB) mining mechanism, which, while benefitting from Bitcoin’s security, requires burning BTC. Whereas PoX requires a transfer of BTC rather than a burn. This has the added benefit of creating a mining incentive pool denominated in Bitcoin.
At a higher level, one of the coolest aspects of cryptonetwork and blockchain technology is composability — the idea that crypto assets and protocols can be freely interconnected in almost any way imaginable, without barriers or permission. Every (public) blockchain, asset, and smart contract is a de-facto API that can be hooked into, built upon, and extended.
This may seem like a minor feature, but I believe this is a breakthrough characteristic. Today, we are seeing this play out most vividly in the DeFi space, where protocols like Maker, Compound and Uniswap interconnect to build new financial products. What Blockstack is doing with PoX brings this approach further to the Web3 / data space. Ultimately, I believe that this approach will enable a broad explosion of not only tech infrastructure but new experience & features, both for consumers and businesses. Zombies eating Kitties is just the tip of the iceberg.
It feels like consumer development in Web3 is moving slowly, and by the user numbers it is. But composable innovation is compounding, and the work that’s going on right now is creating the tools & patterns for what will certainly be huge, exponential leaps in functionality and experience over time.