What is the Nakamoto Upgrade?
The Nakamoto Release is an upcoming hard fork on the #Stacks network, designed to introduce several enhancements, with key improvements being increased transaction throughput and 100% Bitcoin finality. This upgrade marks a significant evolution in the Stacks blockchainâs structure and performance.
Starting at Bitcoin block 840,360, the Nakamoto Release has initiated a multi-phase mainnet rollout. One of the major shifts with this upgrade is how Stacks block production will no longer be tied to miner elections. Instead, miners will produce blocks at a fixed cadence, while the Proof-of-Transfer (PoX) Stackers rely on miner elections to determine when a new miner should take over block production. A fork in this blockchain will only occur if 70% of Stackers approve it, aligning its security with the difficulty of reorganizing the Bitcoin blockchain itself.
Key Advancements in the Nakamoto Release
1. Increased Transaction Speed: The Nakamoto upgrade dramatically improves transaction speed, allowing for faster confirmations. By decoupling block production from cryptographic sortitions, miners can now produce multiple blocks between elections, improving block times from tens of minutes to just seconds.
2. Bitcoin Finality: One of the most critical enhancements is the guarantee of Bitcoin-level finality for all transactions. Once a transaction is confirmed on Stacks, reversing it will be as difficult as reversing a Bitcoin transaction. This reduces the likelihood of forks and increases the network's security.
3. Mitigation of Miner Extractable Value (MEV): The upgrade addresses the issue of Bitcoin miners exploiting miner extractable value (MEV) within the Stacks network. It introduces changes to the sortition algorithm, ensuring that Bitcoin miners do not have an unfair advantage, thus enhancing fairness in miner selection.
4. Robustness Against Forks: By integrating the Stacks blockchain more closely with Bitcoin, the Nakamoto upgrade makes chain reorganizations more difficult and costly. Stackers will play a crucial role in preventing forks by validating and signing off on blocks, ensuring that miners do not arbitrarily reorganize the chain.
Previous Stacks Block Production Design
Before the Nakamoto upgrade, the Stacks blockchain used a miner selection process based on cryptographic sortition, as outlined in various Stacks Improvement Proposals (SIPs). Miners would compete to append blocks by submitting block-commit transactions to Bitcoin. However, this design had several shortcomings, including high transaction latency tied to Bitcoin block production, ineffective microblocks, and vulnerability to low-cost reorganization of the Stacks chain.
The Problems Addressed by Nakamoto
Over time, the Stacks community identified multiple issues with the previous system:
- Slow transaction times due to Bitcoin block dependency.
- Ineffectiveness of microblocks in speeding up transactions.
- Stacks forks occurring independently from Bitcoin forks, making reorganization cheaper for attackers.
- Bitcoin miners using their influence to exclude other Stacks miners' block-commits, leading to unfair advantages in the mining process.
Solutions Introduced by Nakamoto
The Nakamoto Release implements three major changes to resolve these problems:
1. Fast Blocks: Miners will now be able to produce multiple blocks between two sortition elections, significantly speeding up the transaction confirmation process.
2. Bitcoin Finality: The new system will make Stacks forks nearly impossible unless they are approved by 70% of Stackers, tying the Stacks chainâs security to Bitcoinâs.
3. Bitcoin Miner #MEV Resistance: Changes to the sortition algorithm will ensure that Bitcoin miners have no unfair advantage in mining Stacks blocks, making block commits from other miners harder to censor.
The New Nakamoto Design
1. Decoupled Block Production: Stacks block production will no longer be tied to Bitcoin block arrivals. Instead, miners can produce multiple blocks, improving transaction speeds without compromising security.
2. Stackers as Validators: PoX Stackers will need to validate, store, and sign each Nakamoto block produced by miners before the next block is produced. This ensures that miners cannot unilaterally orphan confirmed transactions.
3. Fork Prevention Mechanisms: Stackers will act as a check on miner behavior, ensuring that miners build on the canonical chain and preventing forks.
4. Bitcoin Anchoring: Miners must now commit the indexed block hash of the previous miner's first block in their block-commit transactions. This will ensure that any reorganization of the Stacks blockchain is tied to Bitcoinâs blockchain, greatly increasing the cost and difficulty of such attacks.
5. Punishing Block Commit Censorship: The probability of winning a miner election will be adjusted to make censoring other miners' block-commits unprofitable, deterring Bitcoin miners from blocking other Stacks miners.
The Nakamoto Upgrade brings crucial improvements to the Stacks blockchain, addressing long-standing issues with transaction speed, security, and miner behavior. By aligning more closely with Bitcoinâs blockchain and finality guarantees, Stacks becomes more robust and secure. While the changes introduced by Nakamoto are significant, all smart contracts created before the upgrade will remain functional afterward, ensuring continuity for existing projects on the network.
The Nakamoto upgrade represents a transformative moment for the Stacks ecosystem, setting the stage for future growth and adoption by providing a faster, more secure, and fairer blockchain environment.
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