The Internet is broken; why we urgently need a new decentralized Web.

By joerivdpol | Bitcoin Clarified. | 12 Mar 2022

In 2013 Edward Snowden shocked the world when he broke with the American intelligence establishment and revealed that the United States government was secretly pursuing the means to collect every single phone call, text message, and e-mail. The result would be an unprecedented system of mass surveillance with the ability to pry into the private lives of every person on earth.

Nine years later, not much has changed regarding online privacy and security. Recently, a large-scale data breach occurred in the Netherlands. Millions of citizen service numbers, address information, and phone numbers from the Municipal Health Service “GGD” main Coronasystems have been stolen, causing their personal information to be traded on the dark web. [1] This is, however, just one recent example of where people’s data is exchanged. There has been increasing evidence that our online privacy needs more attention to protect us from governments, big corporations, other malicious people and ourselves. [2]

Data breaches increase the risk of phishing, identity fraud, and stalking. With the current Web 2.0, your data is stored on centralized servers. Your every step online is being tracked and stored, and your identity can easily be stolen. Big companies and governments want to know and exploit what you do, and privacy is a luxury few can afford or understand. You might not have anything to hide online, but you have everything to protect…

“Arguing that you don’t care about the right to privacy because you have nothing to hide is no different than saying you don’t care about free speech because you have nothing to say.” — Edward Snowden.

Big Brother Is Watching You

These days, we live in a digital world and spend a lot of our time on the Internet. We depend and rely on digital systems or networks without realising that they are concentrated in the hands of only a few Internet-based corporations such as Google, YouTube, Facebook, and a few others. While accessing web platforms and pages, we don’t fully understand that the underlying structure of the Internet has become centralized. Hence, we trust centralized web monopolies to control and manipulate our digital lives, sensitive data, and privacy.

As we are moving into the Fourth Industrial Revolution and our lives become more and more digital, the amount of data we share throughout our lives increases dramatically. After all, everyone’s digital version of themselves contains insights into people’s lives; where they are, what they think, what they do, what they buy, their social relationships, health status, and so on. Therefore, we must constantly consider whether human rights in physical life are also guaranteed in everyone’s digital life.

Centralized vs Decentralized

We need a new Internet, now more than ever. An Internet that gives power back to the users and puts security and freedom at the forefront of architectural design. Decentralization is at this moment key to returning control over data, privacy, and safety back to the citizen.
The difference between the current Internet and a Decentralized Web isn’t that complicated. Currently, Internet networks are equipped with servers that act as custodians of data and through which all data pass. So we are using centralized operators like big tech companies and governments, whom we have to trust, to process and store our data in their cloud services. On the contrary, decentralized network connections rely on a peer-to-peer network built on a community where various Internet devices act as hosts rather than a group of powered servers. In this case, no single entity owns any data, and we are not reliant on these intermediaries to connect us. Instead, users retain control of their data and can directly connect and interact with others in their network.

Knowledge is power. And that is what these intermediaries fully understand. You might have seen the movie “The Social Dilemma” on Netflix during these lockdowns. It gives a picture of how your data is exploited to be collected for profit (which also makes it easier for governments to conduct surveillance).

Enter Stacks:
A better Internet, built on Bitcoin

What is Stacks?

The Stacks Ecosystem is a collection of independent entities, developers, and community members working to build a user-owned Internet on Bitcoin. Stacks makes Bitcoin programmable, enabling decentralized apps and smart contracts that inherit all of Bitcoin’s powers. Stacks allows you to access decentralized apps and secure your data with your digital keys that act as your digital identity. These digital keys let you sign in to apps without relying on remote servers or identity providers. All data is encrypted and stored on Gaia — a scalable decentralized storage architecture — and can be easily shared between currently 400+ applications. As a result of this, you truly own your data, digital self-sovereignty.

Why Bitcoin?

Bitcoin is the most secure network in the world. Bitcoin is a tamper-proof source of truth, a value settlement protocol. Once you have the ultimate source of truth, other decentralized protocols and use cases can be built on it. [3] Stacks is a layer-1 blockchain that uses the Bitcoin blockchain as a secure base layer. It integrates smart contracts and decentralized apps natively with Bitcoin’s security, stability, and economic power.

Proof-of-Transfer (PoX)
First consensus algorithm between two blockchains (Bitcoin & Stacks)

The main feature of distributed ledger technology is its lack of central authority. Reaching consensus is at the heart of a blockchain’s operations, which means that the network participants need to agree on the ledger’s state. Consensus algorithms for public blockchains require computing or financial resources to secure the blockchain state. Bitcoin is the first public blockchain and uses proof-of-work in which nodes dedicate computing resources to participate in the consensus algorithm. Due to proof-of-work, it is practically infeasible for any single malicious actor to have enough computing power to attack the network.

The Stacks Ecosystem created a novel consensus mechanism called Proof-of-Transfer (PoX) to secure and accomplish its mission for a user-owned Internet platform. PoX is a new approach to consensus requiring miners to spend Bitcoin to win the next block reward in STX tokens. Instead of burning electricity on proof of work, PoX reuses the already minted bitcoins as “proof of computation”, and miners directly represent their mining cost. Due to this consensus mechanism by providing a native connection to Bitcoin, PoX can secure the Stacks blockchain by using Bitcoin as a secure base layer.


There are two types of participants in the Stacks network: STX miners and STX holders.

1) Stacks miners can view the state on the Bitcoin and Stacks blockchain. STX miners participate in leader elections by sending transactions on the Bitcoin blockchain. A Verifiable Random Function (VRF) randomly selects the leader of each round, and the leader writes the new block on the Stacks chain. STX miners get newly minted STX (coinbase rewards), transaction fees, and Clarity contract execution fees of each block. STX miners express the cost of mining in BTC and spend BTC participating in the leader election.

2) Stacks holders can participate in consensus by locking their STX for a cycle, running a full node, and sending useful information on the network as transactions. STX holders who actively participate in consensus can earn Bitcoin rewards. [4]

Stacks Token & Stacking

The Stacks cryptocurrency (STX) fuels networking activity and contract execution. STX holders can lock it to earn Bitcoin rewards for supporting the Stacks blockchain to consensus. This process of locking STX to earn BTC rewards from the protocol is called “Stacking”.

The STX cryptocurrency was distributed through US history's first-ever SEC-qualified token offering to the general public. The novel Proof-of-Transfer consensus mechanism establishes a native exchange pair between STX and BTC and makes STX a unique asset in that you can stake it to earn yield in another currency (BTC).


The Stacks Ecosystem believes that Bitcoin can be the foundation for a better user-owned Internet, much like TCP/IP for the traditional Internet. Various blockchains will eventually get created on Bitcoin. The network effects of Bitcoin mean that smart contracts around Bitcoin have access to more crypto capital and benefit from higher security. Stacks can make Bitcoin more valuable by turning passive Bitcoin capital into actively deployed capital and bringing more apps and smart contracts to the Bitcoin ecosystem. But most importantly, creating a better and safer Internet.

Privacy, security, and data ownership are the powers that you will need in the age of Big Brother and Big Data.


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Law | Bitcoin | Interested in IT, macroeconomics & Finance

Bitcoin Clarified.
Bitcoin Clarified.

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