Bitcoin Simply Doesn't "Stax" Up Next To This New CryptoCoin

by 99Crypto

The decentralized finance technology segment has greatly expanded thanks to side chain projects that seek to improve the efficiency of the Ethereum network. Some analysts believe that DeFi projects have provided a nice boost to the cryptocurrency markets at a time when Bitcoin is suffering from a protracted period of bearish uncertainty, but what about the BTC blockchain network? Could it benefit from a DeFi development spree?

The current DeFi situation suggests that there's more profit to be gleaned from supporting the various ERC-20 tokens that make up the majority of the cryptocurrency market. Only one blockchain development team has ventured into the world of Bitcoin side chains, and that probably explains why the STX token has been enjoying a nice rally period while Bitcoin continues to languish.

Stacks is a DeFi startup that has chosen to try its hand at developing layers to augment the aging Bitcoin network. STX has appreciated by more than 190% since late June, and it is bound to gain momentum each time Bitcoin does. What the Stacks development team is working on consists of a smart contract layer that will bring vital functionality to Bitcoin. Once the Bitcoin side chain is in place and operational, developers will be able to bring non-fungible tokens to the world's original blockchain network.

There are a few fundamental differences between Bitcoin and STX that have encouraged the growth of the ERC-20 protocol as it has expanded. Chief among these differences are the block times on both blockchains. Bitcoin takes on average 2.5 minutes to produce new blocks, whereas STX's blocks are only about a minute. That means that there's less time for attackers to spend forging on STX than on Bitcoin, and this will improve network security and efficiency.

STX has the benefit of a very active developer community, and the current price action has a great deal to do with the growing interest in Bitcoin side chains. It is not just the STX team that's excited about the growth of the ERC-20 market. Investors as well are seeing the potential in side chains beyond the Ethereum realm.