Blockstack's Proof of Transfer Would Have Miners Pay BTC to Mint Stacks

Instead of relying on its own proof of work, miners under PoX commit Bitcoin, which circulates in the ecosystem.

The Proof of Transfer mechanism was devised to piggyback on the security of Bitcoin, while allowing complex interactions between stakeholders within the Stacks ecosystem.

The miners of the bigger network can contribute to the security of the smaller cousin without calculating any extra hashes.

"A sidechain gives the ability to transfer your Bitcoin off-chain and then transfer that back. Sidechains also benefit from the security of the Bitcoin chain. This is different - this is creating a new crypto asset while using Bitcoin as the mining, or consensus layer."

Ali also recalled some of his previous PhD work on merged mining, noting that the system is insecure if less than 90 percent of miners are on both chains.

In PoX, miners simply expend Bitcoin instead of electricity.

"There are two types of entities: one is the Stacks miner that is processing transactions, writing new blocks on the Stacks blockchain and getting the newly minted tokens. Then there are Stacks holders who can also participate in the consensus algorithm."

Miners engage in a "Leader election" with each block, where the chosen entity is responsible for writing the next block.

The election is random, but it is weighted by the amount of BTC that each miner commits.

Stance on BitcoinThe existing version of Blockstack also heavily relies on Bitcoin to store its data.