I was wondering what brings utility to stacks tokens. I get that it is used as fuel in the stacks blockchain but since guys over at blockstack especially Muneeb have professed so many times that they want minimal use of the blockchain layer, what will bring value to stacks token then? Even if there are millions of user they won’t require stacks to use apps which is a good thing for user experience but not so good for stacks token investors. What am I missing here?
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I would like to ask the same question
I have the same question as well. Also, if the fuel is the stack token and you need a whole token to execute the function of the token, how can the tokens become extremely valuable? In other words, the per token price wouldn’t get up to $1,000 or $10,000 since then the execution of the smart contract or whatever blockchain based transaction would cost a fortune. Maybe I’m entirely wrong but I think we need more information about how the value of the tokens work and how it would grow. Additionally, would you need 1 entire token to execute the transaction or would it work in decimals like bitcoin?
Another question - when you “use” a stack token within the system, where does it go? It’s not like it could be spent because it would disappear or have to change hands. If/when these are on exchanges, who would actually buy them?
I see where the confusion is coming from RE minimal use of blockchain.
Let me give some context here. In my view the “world computer” approaches i.e., where every program is a smart contract and every interaction results in a transaction are not scalable at all. This happened with cryptokitties in 2017 when the game couldn’t even scale to 500K or so users without clogging the entire network.
Most state changes in Blockstack are localized and are not global. This is critical for salability. If I’m sharing a signed doc with Patrick on Blockusign that is not a global state change that anyone other than me and Patrick care about. The Gaia storage system gets involved but the Stacks blockchain does not, in this example.
Now let’s say Patrick wants to publish a hash of the signed document to the Stacks blockchain. That is a global state change at the Stacks blockchain layer. Similarly if a new user register a new username that’s a global state change but a login operation to Blockusign is not.
There will absolutely be operations that require usage of the Stacks token. However, they are subset of critical operations that absolutely must happen at the blockchain layer.
Even with our full-stack design, we’ll need to keep working on the Stacks blockchain salability as the network grows in the future. The Clarity smart contract language is a great example of operations at the blockchain layer and use to tokens as fuel to publish contracts (developers) and use as fuel to execute contracts (users).
The way the current system is designed, growth in users, apps, or smart contracts etc would directly result in digital assets created at the blockchain layer (e.g., usernames) and token used for executing contracts. The scalability benefits of Gaia and localized state changes means that the blockchain should not get overloaded at even low user numbers like a few million; every user interaction does not hit the blockchain as it shouldn’t.
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There are two ways the Stacks (STX) token is used as fuel.
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When Stacks are burned i.e., destroyed as with username registrations. In this use the Stacks are sent to a “black hole” address from which the tokens can never be recovered. We’ve been doing this in production for a while, first with burning Bitcoins this way and now with burning Stacks.
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Stacks can also be used as fuel where the token is not burned but goes to miners as payment for executing smart contracts. This functionality is planned to go live in Stacks blockchain v2.
Everyone should see https://stackstoken.com/circular for full details of our network and plans.
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This still doesn’t really prove or show how the tokens gain value. If a token is needed for every username creation or smart contract execution, wouldn’t they top out at a low value? It seems that as the network grows, the value of each token would remain low or the cost of each username creation would become too expensive. Is there any documentation on the value growth of the tokens themselves? The complex nature of the network aside, this is the fundamental nature of the investment and maybe it could max out at $1 or even $5/token but I can’t see it being a huge growth investment like other coins. Can you further explain?
We can’t comment on any future price or “increase in token value” type discussions. There are regulations around these and you should read all Risk Factors in the SEC offering circular. With that said, here are some technical details about the protocol:
The token is useful for more purposes than listed above. Each smart contract has its own account and may own tokens on its own, and use them for whatever purposes the developer encodes. For example, a smart contract could be written to hold the tokens you send it for a period of time (e.g. as part of an app-specific staking scheme). As another example, a smart contract can convert your tokens to a different app asset. Technically, the set of use-cases for the token is unbound – it will be up to the developer community to add more. In all cases, however, paying for computational work by way of a transaction fee or miner incentive will require the Stacks (STX) token.