Brief Explanation of Proof of Transfer (PoX) by STX
🔗 Core Concept:
Stacks miners want to create new blocks in the Stacks network.
To participate in mining, they must 'pay' in the form of Bitcoin (BTC).
The BTC is sent to STX holders who are stacking (us!)
So you, as a stacker, receive a portion of the BTC paid by the miners.
🎯 In Simple Terms:
Miner:
Wants to create a new Stacks block
Must 'transfer' BTC to the system as a condition to participate
We (stackers):
Lock STX → as proof of loyalty
Then we are chosen as recipients of BTC from the miners
Why are we chosen?
Because we help maintain the security and stability of the network by locking STX, similar to staking.
🔁 Brief Process:
You lock STX for 1 cycle (~14 days)
Stacks miners send BTC to the network as a mining requirement
The protocol selects stackers who will receive BTC (based on the amount of STX and randomly)
You receive BTC reward directly to your BTC address
After the cycle ends, your STX can be continued or withdrawn
🎁 Why BTC? Not STX?
Because Stacks is built to expand Bitcoin, not replace it.
PoX is intentionally designed so that rewards are given in the form of Bitcoin directly, not STX tokens.
This makes STX the only cryptocurrency that can generate passive Bitcoin on-chain, without mining, without traditional staking.
📈 Practical Example:
You stack 1000 STX
In 1 cycle, miners send a total of 1 BTC for consensus
You contribute 1% of the total locked STX
Thus you receive ~0.01 BTC from the total reward
No STX is burned or reduced
You still hold the full STX, just locked for a certain period
The BTC you receive comes directly from the miners, not from STX inflation.
