Thread by Cory Klippsten

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Stack Sats, Not Stacks (STX)

"A deep - but simplified - look into the stacks blockchain and its dangerously alluring and dishonest tactics to attract novice Bitcoiners."

Highlights from a solid review of the fake "building on Bitcoin" altcoin👇 by @sonofsats
"I have been hearing about this “revolutionary” project that is building on the “top” of Bitcoin. I have seen a couple of spaces being hosted on Twitter by the CEO of the project and the project’s official Twitter account."
"I jumped into a couple of these spaces to hear what the buzz was all about. After listening to the “experts” panel on this project, my BS meter went as green as the fear and greed index for bitcoin during the last bull run. This project is none other than the Stacks Blockchain."
"Researching into this project was painful.
It started to become more painful as I proceeded to peel its layers apart - sort of like when you peel a fresh onion and it makes you cry - I just wanted to put together a comprehensive dissection of this ambulatory crypto zombie, that can be easily digested by new plebs."
"Muneeb Ali is the founder and CEO of Hiro PBC (Hiro used to be Blockstack PBC). He is a computer scientist and internet entrepreneur. One of his listed accomplishments is the regulatory framework that allowed him to obtain the first SEC-qualified offering for a crypto asset."
"Yes, This token is a SECURITY, and they wear it on their chest."
"The main purpose of stacks v1 was to enable registration of digital assets and contracts with stacks tokens (STX) and to distribute stacks tokens arbitrarily to the initial investors, also known as a pre-mine."
"Blockstack at the time they raised the ICO money claimed they would release the majority of the capital after self-imposed specific milestones were reached."
"They said they were doing this to “protect” investors and the decision on whether they reached these milestones was through, what they called, an “independent” advisory board. This advisory board was composed of seven members."
"Going through the background of these members I found out who they were and their ties as investors of Blockstack; so not a so independent advisory board. Arvind Narayanan - is recognized for his research in the de-anonymization of data."
"Arianna Simpson - general partner at a16z crypto (quite controversial as of late), a fund that invests in web3 startups."

"Catherine Tucker - Professor of Marketing at MIT and co-founder of the MIT crypto-economics lab, she has provided expert testimony to companies such as Facebook, Microsoft, and US debtors (Nortel Bankruptcy Proceedings)."
"Charlie Saravia - Managing director at Harvard Management Company, he used to work for JP Morgan asset and wealth management. Koen Langedoen - professor of computer science."
"Rodolfo Gonzales Partner at Foundation Capital and is an investor in Blockstack as well as other cryptocurrency projects. Zavain Dar - Investor in tech companies and Blockstack."
"So, I assume that at the time of the release of the Stacks Blockchain genesis block these advisors had some form of economic gains incentives."
"To utilize the stacks blockchain, participants had to “burn” (send their Bitcoin to a wallet address where they were going to be lost for the rest of the time) to get the chain’s native token (STX), and the fuel cost (yes, just like Ethereum's) was to be paid in Bitcoin."
"If this doesn’t make you raise an eyebrow, keep reading. They called this token burn mechanism proof-of-burn (PoB). Why would anyone destroy their Bitcoin to operate on this blockchain when there are hundreds of others that do the same without the insane opportunity cost?"
"This was clear to me after reading the original white paper, and as it turned out the developers and marketers of stacks realized this as well."
"Their ESG’esque inspired the idea of proof-of-burn, a mechanism they claim reused other proof-of-work chain tokens (in this case exclusively Bitcoins) to prove that some type of energy was ultimately used to secure their blockchain and mine STX, A CRYPTO PARASITE of sorts."
"They argued that utilizing this method makes their chain greener to run. Send Bitcoin to a burn address (their version of mining) - get STX, and use STX for their applications in the form of gas."
"Apps that aren’t solving any problems but rather just a solution looking for problems, like every other altcoin.

The Stacks Blockchain’s main use case is storage, but the funny thing is, that blockchains are not good at storing anything. So what is their big solution?"
"Well, the end-user or developer handles all of the backends for the Stacks applications to work."
"As said, they provide the storage drives (hard drives, SSDs, etc.) or use a fully centralized cloud storage service like google drive, dropbox, amazon, or remote network storage, all very vulnerable in their own way."
"All the Stacks blockchain and atlas system (validator nodes) are doing, is storing POINTERS (sort of like an address that tells a program where to look for specific data an app is asking for) to Gaia."
"Gaia is what they call these user-provided storage devices or your cloud storage provider.

There’s nothing genius about stacks, using their blockchain only overcomplicates something that we do every day simply and efficiently."
"There’s absolutely no decentralization here and no true value incentives. The scammy team at stacks calls all of the centralized storage devices you would use to actually store your data “dumb” drives."
"They say that these centralized storage providers can only see encrypted data, the cloud provider only sees a blob of encrypted data. That sounds fantastic, But they fail to mention that this is not decentralization at all. Why?"
"Because your data is not being held by you or the “blockchain” but, by servers that belong to Jeff Bezos. In their white paper, they claim that the whole design philosophy of Gaia is to reuse existing cloud providers' infrastructure. LOL, I truly have no words for this."
"Yet to the whole stacks team this seems ok and decentralized."

They even have the balls to say that people using their blockchain benefit from fault tolerance by removing central points of control and failure."
"Honestly, at this point, I was nauseous and angry at the level of charlatanry.

So, it turned out that proof-of-burn was a stillborn idea. SURPRISE, SURPRISE!
I am no genius, nor do I have a Ph.D., like some of these “geniuses” that are trying to “improve/build onto” Bitcoin, but I saw this coming."
"In a newer white paper called “proof-of-transaction (PoX)” - (essentially releasing Stacks Blockchain v2.0), the super geniuses at stacks blockchain, say that they realized that participants of PoB may be unwilling to destroy Bitcoin to participate in stack blockchain."
"PoX introduces more complexity to the chain, and here is where these types of blockchains realize that there is no way to operate these travesties without the introduction of said complexity."
"Reading through the explanation of PoX is dense and hard to understand, but this doesn’t mean that this complexity makes the chain better. Often the ideas that are simple and easy to grasp are usually the ideas that are the most successful."
"PoX ignores a lot of how we, humans, are incentivized economically. These engineers are trying to create a new system of economic incentives, to make their blockchains operate and this is their biggest flaw and blindspot."
"There is absolutely no direct relationship or connection between this parasitic chain and Bitcoin.

The only way Stacks Blockchain interacts with Bitcoin is as Bitcoin passes from the miner’s Bitcoin wallet to the receiver's Bitcoin wallet."
"It is very important to note that in the process of transferring the Bitcoin from the wallet to wallet all the stacks chain is doing is looking at the Bitcoin chain, just looking at it nothing else. That is it. Stacks do not ever touch Bitcoin."
"Bitcoin is a self-contained protocol, and that is what makes it as secure as it is."
"Stacks is like a passenger at a train station looking at a digital clock (Bitcoin) for reference, and the clock is telling him to rush to catch a high-speed train of complexity (Stacks Blockchain) that will most likely derail at full speed with all of its passengers with it."
"The devs have also seen these issues and pointed them out in their PoX white paper. So what did they do? COMPLEXITY! Yey! See the pattern?"
"For every problem, they try to solve they inherently add complexity which in turn leads them to add more “solutions” that keep adding complexity. This is what Ethereum has been dealing with since its inception. This is what every last shitcoin becomes trying to one-up Bitcoin."
"I know that inevitably there will be people that learn a very tough lesson here, and no matter how it is presented to them that this project is nothing more than an affinity scam, they will jump in."
"They will be lured by the prospect of being able to “multiply” their bitcoin holding’s presented by the Stacks Blockchain. This is nothing but a show of smoke and mirrors."
"I hope that this article will reach at least one new bitcoiner in the hopes that he or she understands that the bitcoin they hold is truly worth more being held offline, in non-custodial wallets than in the hands of these scammers. Stay humble, provide value, and stack SATS!"
READ THE FULL ARTICLE by @sonofsats here:
sonofsats.substack.com/p/stack-sats-not-stacks-stx
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