Blockstack x Satoshi Club AMA Recap from May 26

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Satoshi Club

9 min readJun 4, 2020

On May 26th, Satoshi Club Community had a new chapter of our AMA series. We were visited by our friends of the Blockstack PBC team. Xan Ditkoff and Louise Ivan explained us about applications, the mining and staking processes, the STX token and other interesting topics for our community.

The total reward pool was $200 and was split in 3 parts.

Part 1: $50 to 5 winners.

Part 2: $50 to 5 winners

Part 3: $100 to 30 winners

In this AMA Recap we are trying to summarize some of the most interesting points for you.

PART 1, INTRODUCTION AND COMMUNITY QUESTIONS

Serg | Satoshi Club: Hello, dear friends! Today we present to you Blockstack! Our guests are Louise Ivan (@louiseivan) and Xan Ditkoff (@xanditkoff). Welcome!

Before we start, please tell us a little bit about yourself.

Xan Ditkoff: Hi everyone, I’m Xan. I’ve been at Blockstack PBC (Public Benefit Corporation) for a little under three years, leading application development on top of our technology, as well as focusing on STX Mining and Stacking.

We’re excited to be here!

Louise Ivan: Here just chiming to be of-support.

Irina Kravchuk | SatoshiClub: Great, thanks for the intro. For the first part we’ll have 5 questions from the community.

Q1 from Telegram user, @Eminet001
What are the challenges involved in MINING applications on BLOCKSTACK? Do I have to be a technical expert to mine BLOCKSTACK on your platform?

Xan Ditkoff: Mining is Stacks (STX) token mining, not application mining. And mining STX is really easy. Proof of Transfer and STX Mining work the same as Bitcoin, Miners spend something valuable to compete to mint a new digital asset, just in the case of STX Mining, that something valuable is Bitcoin itself instead of electricity. Because of this, all you need to mine STX is Bitcoin. There’s no requirements for special or advanced hardware. Right now on testnet mining is command line based, but that is the most technical it will ever be.

Serg | Satoshi Club: How much can I get from one BTC for example?

Xan Ditkoff: Not sure exactly given mining was just released on testnet, but at the start of mainnet you’d definitely want to break that BTC up across a larger number of blocks, making a larger profit over time. The reward for mining a single block is 500 STX.

Serg | Satoshi Club: How did you get this idea to mine on BTC? it’s interesting.

Xan Ditkoff: We’ve been tied to BTC in this way for a while. Originally BTC was spent and burned in order to register digital assets and identities. We’ve always wanted to tie ourselves to the most secure infrastructure and that’s what we see Bitcoin as — it’s the global world settlement layer.

Irina Kravchuk | SatoshiClub: So how do you validate the transactions using this algorithm? You use BTC network?

Xan Ditkoff: No we use our own standalone network. Miners, in addition to spending BTC, propose a block made up of Stacks transactions. The mining spend of BTC does hit the Bitcoin network of course.

The whole whitepaper which does a much better job of explaining exactly how the consensus algorithm works is here: blockstack.org/pox.pdf.

Q2 from Telegram user, @GoldRocket27
What level of knowledge do I need to have and what equipment do I need to become a Miner or Staker in Blockstack?

Xan Ditkoff: To add more what I mentioned above, right now while in the early days of testnet both are command line based. That being said, I was able to mine on testnet and I’m not an engineer by any stretch of the imagination or background. As time goes on it will also get easier to participate in both as a user interface is added at a minimum.

In terms of what you’d need to know, you’d want to be looking at both the Bitcoin chain and the STX chain, evaluating both the primary mining market for STX and the liquid secondary market where accessible. Some tools to help do this and execute on opportunities are what I’m currently looking into with the idea of STX Mining bots, similar to a trading bot. But again no special hardware required.

Serg | Satoshi Club: Until this AMA I didn’t know I can stake my BTC and get STX in return. :)

Xan Ditkoff: So it’s not staking BTC. Miners actually spend BTC. STX Token Holders who are Stacking, locking up their tokens and adding value to the network, are sent this BTC by the protocol.

Q3 from Telegram user, @gonca90
What do you think on how we can convince or attract people to use Blockstack over traditional finance? Do you think Staking rewards can be a help in this?

Xan Ditkoff: I do think they’re a start. I think once you have Stacking, you have a critical mass of a network locking up a not insignificant amount of tokens and earning a steady stream of value for it. That locked up capital can be put to many different uses. Simarly that stream of value can also be used in financial Lego blocks. I’m personally very intrigued to see the experimentation that occurs.

In addition to the above, I think we have to continue to make the technology easier to use, and enable developers to create applications and services around any potential financial products.

Serg | Satoshi Club: Please explain what are financial Lego blocks for those who might see this term for the first time.

Xan Ditkoff: Financial building blocks that can be combined to create further financial assets, products, or services. An example in the Ethereum space would be DAI and the MakerDao system.

Q4 from Telegram user, @Ferhat5
Does Blockstack have any Coin Burn / BuyBack systems or any plans for Token Burn to increase the value of Token & attract Investors towards Stake to invest?

Xan Ditkoff: We don’t have any plans for a burn or buyback as Blockstack PBC is completely restricted from any of those activities by the SEC. The Stacking mechanism does provide a reward for token holders, but it’s yet to be seen exactly how big an incentive that will be.

Irina Kravchuk | SatoshiClub: What if the inflation will rise? Any plans to fight/ control that?

Serg | Satoshi Club: Can you tell us more about the SEC the requirements? what rules do you have to follow?

Xan Ditkoff: Stacking compensates for this in most ways, just like staking rewards would in a PoS based network. Blockstack is in the middle of decentralizing the focus that’s cumulatively at that one place right now. That’s included a recent foundation and may include more in the future that will have different restrictions, so it’s possible.

In the US the STX Token was sold to retail investors through a Reg A filing. This means that in the US, out of an abundance of caution, we’re treating it as if it was a security. Separately, however, it’s legally a utility in a number of places outside of the US. In the near future decentralizing focus plays a big role in changing the utility status in the US. But for now, if you’re outside the US there is a secondary market for STX on Binance, KuCoin, and more soon.

Serg | Satoshi Club: What do you think about the regulations in the US regarding Blockchain projects? Are they to strict?

Xan Ditkoff: They definitely are, the hardest part, in my opinion is more the amount of grey area and vaguery vs the strictness. Hopefully that will improve soon, but for now it’s the reality.

Irina Kravchuk | SatoshiClub: What do you mean by decentralizing focus?

Xan Ditkoff: The recent foundation creation is an independent entity that is going to take over some of the core protocol development PBC previously focused on, in addition to things like grants and governance. There may and probably will be more entities that carve out different areas of focus from PBC, decentralizing those jobs.

Irina Kravchuk | SatoshiClub: Thanks for that. Decentralizing focus sounds good. This term will get adopted.

Q5 from Telegram user, @yakupsen
What is the daily profit from Blockstack network mining? What is the focus of the Blockstack team this year and the future are there any targets or plans for the Blockstack Network in the future?

Xan Ditkoff: The mining network isn’t live yet, so we’ll have to wait and see. Mining is live on the testnet right now, which you can check out here: testnet.blockstack.org.

Our focus this year is definitely on launching the Stacks 2.0 network upgrade, which includes PoX, STX Mining, and Stacking, as well as Clarity Smart Contracts. As part of that a large focus is on potential miners, both getting the word out about STX Mining, and educating/providing the necessary tools.

Irina Kravchuk | SatoshiClub: Does the project generate a revenue that funds the operations?

Xan Ditkoff: It does not. The long term vision of Blockstack PBC I have at least is a small entity working on the protocol, or maybe it all just translates over to the foundation. There are other areas of focus that entity can being made around that can and will have commercial interests.

PART 2, TELEGRAM COMMUNITY LIVE QUESTIONS

The chat was open for 2 minutes and more than 600 questions were posted by the Satoshi Club community. Our guests chose five of them.

Q1 from Telegram user, Doctor Crypto Mangunkusumo
I heard that Blockstack spent 10 months getting SEC approval for its Reg A+ filing. What’s is the utility for this approval?

Xan Ditkoff: It was a way to make the token available in the US to retail investors, so everyone. It definitely wasn’t ideal, but the long timeframe was mainly because we were the first to do it for a token. The US definitely needs to get better frameworks for token raising. Especially if we can now make it to utility status, that would be pretty huge, as it would prove out that you can issue a token as a security in the early days that turns into a utility as the network grows.

Q2 from Telegram user, OYIBO PEPPER
I’m interested in incentives, kindly explain more about STX stacking to Earn BTC, what’s the minimum and maximum requirement and APR? Also explain more about your mining, hardware and software requirements.

Xan Ditkoff: You can take a look at this calculator a that a community member made around Stacking to see some of the numbers, but that’s highly dependent on conditions once things are live: https://www.stxstacking.com.

Q3 from Telegram user, Anthony
The whitepaper says that the miners participating in the Stacks Blockchain must compete to lead blocks by transferring Bitcoin, but how you guarantee that the users Will not cheat transferring external BTC to keep the lead?

Xan Ditkoff: Not sure what you mean by transferring external BTC, but the protocol provides an address, any BTC payment that comes in with a proposed block is considered a single miner by the protocol. Would recommend reading through the whitepaper for more on how we prevent consensus attacks.

Q4 from Telegram user, Jhonathan
For mining we need a specific amount of BTC, right? What is the minimum and maximum limit that can be mined on the Blockstack platform?

Xan Ditkoff: Nope, no minimum or maximum. I’d expect in the early days it will probably be smaller amounts of BTC going through the system per individual block. But we’ll see. As that pairing grows, the economic loop between mining and stacking does as well. We’ll have to see what happens.

Q5 from Telegram user, Ivan Letov
What new cryptographic business models can be created after the launch of Stacks 2.0? What are the opportunities for STX coin holders?

Xan Ditkoff: In addition to simply taking part in consensus themselves, building business around consensus: pooling and delegation services for Stackers, mining bots and algorithms for STX mining. And then there’s the services that can be created on top of Stacking as well. Combine this with the ability to making apps where users own their own identity and data, that have smart contract based usage models, and there’s a lot of potential to create.

PART 3, QUIZ RESULTS AND CONCLUSION

As usual, for the third part Satoshi Club Team asked the chat 4 questions about Blockstack. A link to a Quiz Form were sent into the chat. Participants had 10 minutes to answer.