Blockstack (Stacks)

What Is Blockstack (Stacks)?

Blockstack is a blockchain-based, decentralized Internet platform that was launched in 2017. It allows users to completely own and control their personal data; the network applications that use the data are run locally on the user’s browser. A compatible browser is sufficient to access everything available on Blockstack.

Blockstack became the first company to receive approval from the Securities and Exchange Commission (SEC) to sell digital tokens, known as "stacks" (STX), in an initial coin offering (ICO) in 2019. Under the SEC's Regulation A+ exemption, Blockstack's IPO raised $23 million. At the time, these tokens could not be traded by U.S. investors on U.S. exchanges.

However, with the introduction of Blockstack's Stacks Blockchain 2.0 on Jan. 14, 2021, Stacks tokens can be traded by U.S. investors on U.S. digital asset exchanges because Blockstack's network will be no longer be controlled by any single entity. Therefore, its Stacks token can no longer be considered a security under SEC regulations.

Key Takeaways

  • Blockstack is a decentralized computing platform, built on blockchain technology, that focuses on individual control of online data and identity. 
  • Through Blockstack, users choose which data to share, whom to share it with, and who stores their data, while application developers can't access the data.
  • The system utilizes applications that are run locally on a user's local machine.
  • In 2019, the Securities and Exchange Commission (SEC) approved the issuance of "stacks," (STX) tokens, raising over $23 million.
  • To win the approval, Blockstack had to work closely with the SEC to develop a protocol from scratch; it was the first digital token offering under Regulation A+.

Understanding Blockstack (Stacks)

With Blockstack, users do not have to upload data to an external site, like Facebook, or to an application, like WhatsApp. However, they can still share their data and media feed with friends and other users. This is achieved using decentralized applications (also called dApps) that are based on blockchain technology. DApps are run locally on the user’s browser, and users continue to own their data (text, images, videos, files, etc.).

Using the decentralized security granted by blockchain technology, a Blockstack user gets digital keys to create their identity on the Blockstack network. User data can be stored locally or connected to their storage hosting providers, which allows the user to retain full control.

Data processing is run on a client’s local machine, which is connected to the network (but not via a platform's centralized servers). A networked storage system, called "Gaia,' enables what Blockstack describes as “user-controlled private data lockers.”

Users connect their “data lockers” to Blockstack’s client software, and applications write to the lockers directly. The locker acts as storage for all the information attached to a user's account (also called a user's “universal ID”).

Sharing of content is achieved through a secure and encrypted medium. The Blockstack network supports tokens, like bitcoin, and other cryptocurrencies and is available for peer-to-peer (P2P) transfer or charging for downloads, subscriptions, and more.

SEC Approval of STX

In a still largely unregulated cryptocurrency market, Blockstack received the first-ever approval by the SEC to sell bitcoin-like tokens in an initial public offering. Prior to this approval, the company had raised more than $50 million in funding through approved token sales to accredited investors. Blockstack's IPO raised $23 million.

The public offering was approved under Regulation A+ of the 2012 Jumpstart Our Business Startups Act, which was introduced as a way to help fledgling companies raise capital with minimal disclosure requirements. Blockstack's success in winning approval will now provide other young cryptocurrency and blockchain businesses a template for how to proceed in raising funds of their own.

As of November 2021, one STX trades for roughly $2.15, and the platform's aggregate market capitalization (in terms of token value) stands at roughly $2.27 billion.

Following the launch of Stacks 2.0 in January 2021—and the end of STX being treated as a security (according to SEC regulation)—Blockstack filed an exit report to the SEC, stating that it would no longer be filing the required reports with the U.S. regulator.

What Is Stacks (STX) Coin?

Stacks token (STX) is the cryptocurrency of the decentralized computing platform Blockstack. Blockstack is a project that utilizes blockchain technology to expand the functionalities of bitcoin by serving as a second layer protocol. Blockstack can improve upon the benefits of bitcoin (and other virtual currencies) by offering advanced smart contract capabilities and an entire infrastructure designed to deploy its unique applications.

How Do I Purchase Blockstack Coins?

You can purchase Blockstack coins online, for example on the Binance exchange.

What Is the Symbol for Blockstack Coin?

The symbol for the Stacks token is STX.

How Much Is STX Worth?

Blockstack's price is approximately $2.15 (price to USD). One STX is worth 0.0000323 Bitcoin (price to BTC).

What Is Stacks Doing Now?

On Jan. 14, 2021, Blockstack launched its Stacks Blockchain 2.0. This has resulted in a new designation for Blockstack's Stacks token, which can no longer be considered a security under SEC regulations. As a result, Blockstack will not be required to submit regular financial reports as a company and its Stacks token can be traded by U.S. investors on U.S. digital asset exchanges. Prior to this, the Stacks token (STX) only traded on exchanges outside the U.S.

Article Sources
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  1. U.S. Securities and Exchange Commission. "Blockstack Form 1-K." Accessed Nov. 8, 2021.

  2. U.S. News and World Report. "Blockstack's Digital Currency 'Stacks' to Be Tradable in U.S. Once New Blockchain Arrives." Accessed Nov. 8, 2021.

  3. Stacks. "FAQs." Accessed Nov. 8, 2021.

  4. Coindesk. "Blockstack." Accessed Nov. 8, 2021.

  5. Stacks. "Blockstack Announces SEC Filing for $50M Regulated Token Offering." Accessed Nov. 8, 2021.

  6. Coinmarketcap. "Stacks." Accessed Nov. 8, 2021.

  7. Securities and Exchange Commission. "UNITED STATES SECURITIES AND EXCHANGE COMMISSION: Form 1-U." Accessed July 24, 2021.

  8. Binance. "Binance Lists Blockstack (STX)." Accessed July 24, 2021.

  9. "Blockstack (STX) price." Accessed Nov. 8, 2021.

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