While the Bitcoin and crypto markets are deep in the red, one altcoin stands out today, with a double-digit price increase: Stacks (STX). Together with the Lightning Network, the project is currently considered the most promising layer-2 technology for Bitcoin and is currently benefiting from the dilemma of network congestion.
There are currently over 425,000 unconfirmed transactions in the meme pool. Before being added to the Bitcoin blockchain, transactions are sent to the network’s meme pool, where they wait to be selected by a Bitcoin miner and inserted into the next Bitcoin block. At medium priority, a transaction currently costs an average of $19.04.
The case for stacks
The congestion sparks a heated discussion: While one side calls it a DDoS attack on Bitcoin, the other side calls the reason for the high fees, Bitcoin rankings and BRC 20 tokens, a revolution. But whichever side one chooses, one thing becomes clear. Layer 2 technologies are absolutely necessary and can emerge as big winners.
Revolution or DDoS?
🚀Market cap based on BRC20 #Bitcoin tokens reach $1 billion.
⌛️Sh*tcoins cause extreme congestion on the network. There are still 425,000 unprocessed transactions piled up in the meme pool.
— Jake Simmons (@realJakeSimmons) May 8, 2023
However, if BTC price alone is to be the leading indicator, the current dilemma surrounding BRC20 tokens on the Bitcoin blockchain is not doing the network any good. Binance hasn’t really done the market a favor either with the multiple withdrawal stops.
But in the long run, higher fees are needed for the BTC network to replace the falling block reward. Co-inventor of Stacks, Muneeb Ali wrote today on Twitter that high fees are not an attack on Bitcoin because they will be the norm when Bitcoin grows to a billion people. On the contrary, Ali says they are a wake-up call for developers to improve and grow Bitcoin L2s.
Bitcoin fees just hit a new all-time high. 500x more than a few months ago. Officially marks the beginning of the arms race to build the best Bitcoin L2s. Lightning, Stacks and Rootstock have an edge. Time to build.
Bitcoin expert Will Clemente too made the case for L2 today:
If we are in a new regime of higher Bitcoin tx fees due to ordinal numbers/brc-20s, think there is a very compelling setup for the lightning network in the next few years.
STX up 10%
During the first days of May, the Stacks price has broken a downtrend that has persisted since March 20 (black line). Thanks to today’s 10% increase, STX price now faces the 23.6% Fibonacci level at $0.82. At the price level, stronger bear resistance can be expected. As of April 19, STX has failed to regain the mark.
If successful, a rally to the $0.92 region, where the 38.2% Fibonacci is located, seems possible. After that, the road to the psychologically important point of $1 would be clear (50% Fibonacci). If the bulls also break this level, $1.07 (61.8% Fibonacci) and $1.18 (78.6% Fibonacci) would be the next targets.
Featured image of xVerse wallet, chart from TradingView.com
