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Hackernoon logoCan Bitcoin Drive DeFi Towards Wider Adoption? by@R4d3k

Can Bitcoin Drive DeFi Towards Wider Adoption?

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@R4d3kRadoslaw R.Bakon

strefa.crypto

Bitcoin has been the king of blockchains for more than a decade. Most people have come to recognize that the Bitcoin network is incomparable when it comes to security.

But Bitcoin’s limited scripting language has been seen as a deal breaker to
developers looking to build dapps or deploy smart contracts. Because of that many people think it is easier to recreate Bitcoin on Ethereum, but actually a much better solution is to create Ethereum functionality on Bitcoin. Adopting this is still in its very early stage, but people are definitely beginning to realize the value and the opportunists of building in the Bitcoin ecosystem and not in parallel with it. As a result, many developers end up building their own blockchains, trying to create native Proof of Work protocols or Proof of Stake more complex and effective, but these tend to be much less secure and stable.

The best solution to take advantage of the existing Bitcoin network and to bring a user-owned internet (Web 3.0) is to anchor applications and smart contracts to the Bitcoin network in a way that uses Bitcoin as a reserve currency and its powerful blockchain as a security mechanism. This all brings us to the novel Proof of Transfer (POX) consensus mechanism of the Stacks 2.0 blockchain that unlocks this possibility and which is already around the corner!

Stacks 2.0 blockchain is on target to reach code completion by December 15th, 2020 and the launch date is set on January 14th, 2021!

Stacks 2.0 we can treat as another layer built on the foundation of Bitcoin.
This blockchain is based on trust and security provided by Bitcoin network. Thanks to the Clarity Smart Contract programming language and Proof of Transfer consensus, developers will be able to create Smart Contracts in a much safer language that is predictable and settable.

After the mainnet developers and miners will be able to interact with the full Proof of Transfer mechanism, and users will soon be able to test Stacking. With PoX, miners submit bitcoin (BTC) to mint new stacks (STX) tokens, and stackers can lock-up (or pool) their STX tokens to receive BTC rewards.

Stacking Flow

"STX enables BTC secured DeFi." - Patrick Stanley

Proof of Transfer solves a few important problems, provides developers
new tools, and enables more functionalities on top of Bitcoin. This is possible through the use of the Clarity Smart Contract language that optimizes for predictability and security. There are two key elements to how this is done:

  • Clarity is a decidable language, meaning you can know what it's doing from reading the code.
  • Clarity is interpreted, not compiled, so that the source code is published and executed by blockchain nodes

WYSIWYG -What You See Is What You Get. Clear Code example of Clarity Smart Contracts Programming Language

Putting trust in code only about our savings requires the highest level of security. The above features of the Clarity language helps eliminate common smart contract vulnerabilities to create a safer environment for programmatically locking up money.

Summary

Clarity Smart Contracts programming language and the Proof of Transfer consensus eliminates the choice between flexibility and security. With PoX, developers can build functionality on top of a secure foundation in Bitcoin while Clarity’s design helps eliminate whole classes of smart contract bugs and provides greater predictability.

Stay tune for the #DeFionBTC revolution!

strefa.crypto

Previously published at https://strefacrypto.medium.com/defionbtc-the-future-of-defi-is-on-bitcoin-8c9b4c87802f

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