Layer-2 Network Stacks Begins Nakamoto Upgrade

Nakamoto could boost transaction speeds on Stacks and open the door for smart contracts using Bitcoin as a base layer.

Stacks, a layer-2 blockchain that enhances the Bitcoin network, has commenced its Nakamoto upgrade to accelerate transaction speeds.

The upgrade, named after Bitcoin's pseudonymous creator, Satoshi Nakamoto, will separate the block production schedule on Stacks from that of Bitcoin.

Network operators now have two weeks to implement the Nakamoto upgrade, which will be completed by a hard fork. The upgrade introduces a new method of producing Stacks blocks, utilizing a proof-of-transfer consensus algorithm. Users burn bitcoin (BTC) to mine Stacks blocks and earn rewards, a process that began being implemented in April, with block "signers" coming online to validate "tenures" of transactions.

Tenures are periods of time that miners are assigned to produce multiple blocks that are ultimately settled on Bitcoin.

Stacks aims to introduce greater utility such as smart contracts and other decentralized finance-related functions using Bitcoin as a base layer. Towards this goal, Stacks is also rolling out sBTC, a bridging asset that allows users to bridge their BTC to the Stacks economy.

STX, the token used as fuel for the network and as the reward for miners, has seen an 8% decrease in the last 24 hours. The broader digital asset market has also experienced a downturn, with the CoinDesk 20 Index falling by nearly 4%.

Read More: Bitcoin's Programmability Draws Closer to Reality as Robin Linus Delivers 'BitVM2'

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Jamie Crawley is a CoinDesk news reporter based in London.