Blockstack's New Consensus Mechanism Creates New Use Case for Bitcoin

Blockstack CEO Muneeb Ali.Blockstack is giving its long-term holders a new way to earn bitcoin.

"We accept bitcoin as the most secure blockchain in the world. We accept a world where this will continue to be the case," Blockstack CEO Muneeb Ali told CoinDesk in a phone call.

Bitcoin did this first by essentially requiring miners to spend electricity to participate, with its Proof-of-Work consensus mechanism.

By requiring miners to buy bitcoin and turn that over to the network to participate, Blockstack thinks it has found an ample cost to help prevent malicious entries.

Called Proof-of-Transfer, the new consensus protocol has two kinds of participants: miners and stackers.

"Proof of Transfer is a proposed design that uses Bitcoin's Proof of Work to launch new blockchains that are anchored in Bitcoin's security," Blockstack wrote in a blog post shared with CoinDesk in advance.

"Further, PoX can give incentives to earn Bitcoin rewards to participants of such new blockchains. Such Bitcoin rewards were not possible before PoX. These rewards can potentially be used for use cases like consensus participation, ecosystem developer funds, incentives for specific players, etc."

"In our process of mining, the miners can model PoX mining as almost as an exchange," Ali said.

Miners' income opportunities will also go up when Blockstack is ready to release its smart contract language, Clarity.

The current plan, Ali said, is that once 20 miners activate the new version of the software, Blockstack 2.0 will go live.