The New Relationship Between Bitcoin, NFTs and Stacks: Is This the Trend of the Future?
Here I would like to explain a new movement at the intersection of the worlds of Bitcoin and NFTs (non-exchangeable tokens). It is Bitcoin NFTs via a platform called Stacks. What does this mean?
Bitcoin Meets NFTs
We say that NFTs are coming to Bitcoin, and that is precisely what is happening through Stacks, which has a mechanism for settling its own transactions into the Bitcoin blockchain.
However, this raises one question. Why is NFT taking place through Stacks and not bitcoin? It is because Bitcoin does not have smart contract capabilities. That is, Bitcoin itself cannot execute code to manipulate NFTs, DeFi protocols, or decentralized apps like Ethereum or other networks.
What is Stacks?
That’s where Stacks comes in: a blockchain that can run smart contracts and settle all its transactions into bitcoin. It is a layer 1 blockchain and takes a similar approach to Ethereum’s layer 2 scaling solution.
Stacks enables NFTs against the backdrop of the security and liquidity of the Bitcoin network. And because it does most of its work away from the bitcoin mainnet, individual transactions are faster, cheaper, and more energy efficient.
Bitcoin-backed NFTs
The concept of bitcoin-backed NFTs is not entirely new, but its framing is new now that the market has changed and matured significantly. Visual assets were tokenized and shared through Counterparty, a protocol built on Bitcoin.
Now, however, NFT collections are appearing on Stacks amidst the growing demand for NFTs as a lower cost alternative to Ethereum.
Putting NFTs on Bitcoin may seem like a novelty, but it may have an advantage. Bitcoin is the largest cryptocurrency in market capitalization, and its most ardent supporters are often maximalists, and as a result tend to avoid all other cryptocurrencies and their networks. combined with Stacks’ scalable technology, these NFTs may stand out in an increasingly crowded market may stand out in an increasingly crowded marketplace.
For now, however, Stacks’ NFT scene is still small: according to the Stacks dashboard, the most traded NFT collection is Bitcoin Birds, with 16,651 STX (worth about $23,100) traded in the past 24 hours.
Compare this to the $21.3 million NFT traded on Ethereum’s game, Axie Infinity, and the $3.8 million volume on CrypToadz, a fast-growing avatar project, and Ethereum’s dominance in the NFT space is overwhelming. However, there is room for rival platforms to make waves, as the recent increase in Solana activity shows.
Example: Bitcoin Birds
One of the Stacks projects, Bitcoin Birds, was developed by a 12-year-old boy, Abraham Finlay. His family got into Bitcoin early on, and his father has been following the Stacks project for a long time; Abraham intends to hold Bitcoin for the long term and says it is very cool to have an NFT on Bitcoin.
Conclusion.
We have seen how the three elements of Bitcoin, NFTs, and Stacks intertwine. We will be keeping a close eye on how exactly NFTs on Bitcoin will work and whether this could be a future trend. The strong security and liquidity of Bitcoin and the smart contract capabilities of Stacks create new NFT possibilities.
And while the Stacks NFT scene is currently small, the possibilities are endless. It will contribute to the further development of the NFT market by offering new perspectives that are different from existing platforms and more options for users.
At the same time, however, there are still issues that need to be resolved, such as bitcoin scalability, transaction costs, and energy efficiency. One solution to this problem is the Layer 1.5 solution offered by Stacks.
Where the three elements of Bitcoin, NFT, and Stacks intersect, new possibilities abound. Let’s keep an eye on future developments.
※reference URL:Bitcoin NFTs Are Emerging on Stacks. Can They Thrive?
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