Bitcoin blockchain is a complex system of different protocols. Two protocols, Stacks and Ordinals, are often confused with each other or taken together as the same thing. However, there are some key differences between Stacks and Ordinals that everyone should be acquainted with.
What are Bitcoin Stacks?
Bitcoin Stacks is a layer 2 protocol. Stacks (formerly known as Blockstack) is a layer 2 solution implemented on the Bitcoin blockchain in 2018. Since then, it has undergone its second release on the main net, giving way to the Stacks that are known today.
Stacks are linked to the Bitcoin blockchain through its proof-of-work consensus mechanism. While Ethereum is often referred to as the primary place to use smart contracts, Stacks provides an identical capability to Bitcoin.
While Stacks is a Bitcoin layer 2 solution, it uses something known as proof-of-transfer. Proof-of-transfer is a modified version of proof-of-burn. By burning their STX tokens, miners can mine on the Stacks blockchain.
The Stacks Cryptocurrency is STX
The Stacks protocol also comes with its own cryptoasset, STX, and it is important to understand its purpose and functionality within the Stacks ecosystem.
STX is used to pay pink fees, make payments within Stacks-based DApps and reward miners for protecting the blockchain.
The Stacks protocol has its own purple of major contributors, including miners. Miners must burn their STX tokens to mine them through the proof-of-transfer mechanism.
However, for a Stacks block to be mined, a Bitcoin transaction must first be made on the original blockchain. For each Stacks block, there must be a Bitcoin block to which it is linked.
What are Bitcoin Ordinals?
In early to mid-2023, Bitcoin Ordinals became a hot crypto topic.
Many choose Ethereum over Bitcoin simply because the older blockchain offers so much more. Ethereum has long been known as the primary blockchain for the creation, coining and sale of NFT, while the Bitcoin blockchain serves as the ledger used for Bitcoin transactions.
Nevertheless, many Bitcoin enthusiasts have been eager to address this versatility problem with some useful blockchain solutions, including Stacks and Ordinals. We already know what Stacks is, but Ordinals brings a completely new element to the game – Bitcoin NFT.
The Bitcoin Ordinals protocol was launched in January 2023. This is a layer 1 protocol that is used to number satoshis. Like Stacks, Ordinals gives the Bitcoin blockchain additional capabilities, but they are not the same.
Bitcoin NFTs, or Bitcoin ordinals, are made up of satoshis. Satoshis are tiny fractions of individual BTC coins, with one Bitcoin containing 100 000 000 satoshis. Although tiny, satoshis can transfer data, which can then be tracked.
This is done by enrolling data into the satoshi, a process made possible by the Ordinals protocol. By attaching additional data to a personal satoshi, such as comments or messages, a non-fungible token (NFT) is effectively created.
However, because the Bitcoin blockchain does not use smart contracts, neither do ordinal ones. This separates Bitcoin’s NFTs from other well-known NFT-compatible blockchains, such as Ethereum, Solana and Cardano.
Although Ordinals is a 2023 phenomenon, it was made possible by the 2021 Bitcoin Taproot update, which enabled satoshi enrollment.
Stacks and Ordinals Improve Bitcoin
Although Stacks and Ordinals have different natures and purposes, it is undeniable that both solutions offer their own great advantages. If you are a Bitcoin’s lover but also want to take advantage of DeFi’s benefits and all its versatility, these two protocols may be useful to you.
By Marina Meza
