In the blockchain, there is an impossible triangle, which is security, decentralization and scalability. When these three are introduced into the blockchain, you can only choose two out of three and cannot satisfy them all.

Bitcoin is a blockchain system that maximizes security and decentralization at the expense of scalability. The block generation time of Bitcoin is about 10 minutes, while other common public chains such as Ethereum 2.0, Solana, etc. have block generation times of seconds or even milliseconds. It can be seen that Bitcoin has made huge sacrifices in terms of efficiency and security. And decentralization is the highest, which has created a huge demand for the expansion of Bitcoin by a large number of blockchain participants.

Bitcoin Layer2 is an expansion plan for Bitcoin. It is mainly an upper-layer expansion for application scenarios where Bitcoin is scarce and relatively inefficient operating efficiency. The purpose is to solve the scalability dimension of the above-mentioned impossible triangle. For example, the Stacks system.

The Stacks system is a Bitcoin upper-layer network that supports decentralized applications and smart contracts. It is connected to the Bitcoin blockchain system through a consensus mechanism spanning two chains, thereby achieving both the security of Bitcoin and smart contracts. The purpose of enriching application scenarios.

Stacks takes a pyramid approach, with a base settlement layer at the bottom (Bitcoin), then adding smart contracts and programmability on top of that (Stacks), then adding a scalability and speed layer on top of that (Hiro’s subnet) . By adopting this layered approach, it not only has the same rich functionality as public chains such as Ethereum, but also avoids many of the shortcomings of these complex public chains.

Stacks is a layer 2 of Bitcoin with some unique properties, such as its own token, which acts as an incentive mechanism to maintain its historical ledger of all transactions and operates according to its own security scheme.

Although Stacks adds additional functionality to Bitcoin, it does not change the content of Bitcoin itself due to its Proof of Transfer (POX) consensus mechanism. This is also what differentiates Stacks from L2 scaling solutions on Ethereum (such as Polygon or Arbitrum), which keeps Bitcoin itself simple and secure, while other features and optimized speed are implemented using other layers, so Even if other layers are compromised, it will not affect the base layer (Bitcoin).