BlockStack: Decentralized Token Mechanism For Crypto Apps?

Blockstack is a new internet for decentralized apps. The development team just released a whitepaper for the Blockstack token. Here’s our review.

What is Blockstack?

Blockstack is a new type of internet built on blockchain technology. Founded in 2013, Blockstack consists of an alternate DNS and alternate public key infrastructure, making it the first implementation of a decentralized NS system on top of the bitcoin blockchain.

In layman’s terms, Blockstack is a project that aims to move the internet onto the blockchain. It’s a tokenized internet browser.

The platform is open source. It was officially launched on the bitcoin blockchain in September 2015. As of March 2016, Blockstack was the largest non-financial system using the bitcoin blockchain by transaction volume.

The company was originally founded as Onename back in 2013. In May 2017, Blockstack made headlines for releasing a decentralized browser add-on, which they described as a type of “Netscape for the decentralized internet.” Today, anyone can use that add-on with modern browsers like Chrome, Safari, and Firefox. Developers can also use the add-on to develop apps for Blockstack.

In October 2017, Blockstack made headlines again for announcing its Blockstack token whitepaper, which included all of the details users needed to know about the upcoming Blockstack token. The whitepaper was more than just an announcement: it was also a call for feedback from the community:

“This whitepaper represents a call for feedback from the community,” explains the official website. “It is meant to be a living, breathing document and start a conversation about how the system could be improved. So if you have thoughts and want to help, we’d love to hear from you on forum.blockstack.org and chat.blockstack.org.”

How Does the BlockStack Token Work?

The Blockstack token is a substantial upgrade to the Blockstack network. Announced on October 12, the update introduces components and mechanisms designed for the long-term success and growth of Blockstack as a tokenized, decentralized internet.

Some of the key functions and features of the BlockStack token include:

Incentive System:

This incentive system allows BlockStack to overcome the “two sided market” problem where neither developers nor users have an incentive to participate in a platform, in large numbers, until the other participates first. Developers won’t build for a platform until users are using the platform, and users won’t use the platform until developers have built things.

Systems of Governance:

The token creates a system of governance that ensures no single entity can control the network or protocol. This governance system also allows stakeholders to vote on protocol upgrades.

New Features:

Blockstack’s token introduces new features like support for independent mobile clients with no need for a trusted third party, as well as support for advanced namespace operations like namespace auctioning, atomic swaps, and more.

Furthermore, each Blockstack token is known as a stack, and stacks can be earned through three different methods:

Proof of Burn Mining:

Cryptocurrency holders can get mining rewards by sacrificing (i.e. “burning”) a certain amount of bitcoin. The majority of tokens will be released through this proof of burn mining process; anyone can participate in this process.

App Rewards Mining:

Developers can get mining rewards by building an application that people like, then getting votes from the network’s app raters.

Web of Trust Mining:

Users can receive mining rewards in the early days of the network by performing an identity verification with a trusted third party.

Overall, these systems are built to get tokens in the hands of users and developers. Blockstack wants to achieve a wide distribution.

The token is also designed to enable support for light clients. Today, Blockstack users run full nodes to verify transactions and data mappings independently. However, running a full node is too resource intensive for mobile devices, and it may not be allowed by mobile platform vendors. By introducing the Blockstack token, Blockstack can facilitate the launch of light clients.

BlockStack Review Summary

The original internet was meant to be a decentralized network. Although certain layers of the network remain decentralized, the application layer of the internet has several centralized points of control and failure. With that in mind, Blockstack is a new internet for decentralized applications that replaces points of centralization from the application layer of the internet. Those points of centralization include DNS root servers, certificate authorities, and centralized data stores.

Blockstack has been rapidly gaining ground since 2017. With the launch of the Blockstack token whitepaper, the development team has showcased a major upgrade to the ecosystem. The Blockstack token allows for decentralized governance and incentive mechanisms for a complete decentralized app ecosystem. The token also facilitates features like atomic swaps, light client support, and new mining mechanisms.

Stay tuned for more information about the Blockstack token. The release of the whitepaper in October 2017 was just meant as an announcement to the community – and a request for feedback. The tokens have not yet been launched.