Thread by @muneeb

Miners have spent 96.1 BTC to secure the first 5000 Stacks blocks. The average mining profitability is 108.1%.

A thread on mining stats👇

1/ Instead of creating a separate proof of work or proof of stake network, Stacks uses a unique consensus mechanism that reuses Bitcoin’s hash-power.

Sharing compute power and network security with Bitcoin is critical for the long-term durability of smart contracts.

2/ Miners compete in leader election on the Bitcoin chain and bid in BTC. A Verifiable Random Function (VRF) selects the winner.

Winning miner writes the Stacks block, collects newly minted STX, and collects the gas fees for smart contracts.

Mining is open to anyone.

3/ All data from Stacks chain automatically settles on Bitcoin every block (an analogy would be a lightning channel that auto settles every block).

Stacks holders participate in consensus by locking STX in a smart contract to earn BTC (the BTC from miner bids).

4/ That sounds good in theory but would it work in practice? Let’s look at the data from the first 5000 blocks (~7 weeks).

79 unique miners participated. 40 successfully mined at least 1 block. All you need is BTC and mining software.

5/ Miners spent an aggregate amount of 9,611,672,420 Satoshis, or 96.1 BTC. Out of which approx $2M worth of BTC went to Stacks holders as yield.

Rest of the BTC was burned (the protocol burns BTC below 25% liquid supply participation for a security reason). We’re above 25% now.

6/ Mining has been very profitable for those who can mine consistently, over a sustained period of time. Approx 108.1% profitability over this period.

Mining is already becoming more competitive and that’s not surprising: there is money on the table every block!

7/ This design opens the door for incredible innovation on Bitcoin.

Bitcoin is the secure base, it’s hard money. You now get smart contracts on top that settle to Bitcoin.

Store of value (BTC) working in harmony with gas for smart contracts (STX).

8/ Daemon, a Hong Kong-based tech company, did a more detailed mining analysis of the first 5000 Stacks blocks.

See the Daemon post for full details:
daemontechnologies.co/first-5000-blo…