Bitcoin Layer-2 Network Stacks Halted for 9 Hours—What Happened?

Stacks, a layer-2 scaling network for Bitcoin, experienced a significant disruption Friday as block production stalled for nearly nine hours.

The incident, attributed to a Bitcoin reorganization (reorg) and “unexpected miner behavior”, sent shockwaves through the Stacks ecosystem and triggered a 12% drop in the STX token price over the past 24 hours.

Stacks was built to enable functionality like smart contracts to power decentralized applications (dapps) and NFTs on the Bitcoin network, since the blockchain itself wasn’t designed for such features that have flourished on rival networks over the years.

The network is designed to leverage Bitcoin's security and immutability, providing a secure platform for developers to build scalable blockchain applications while still being rooted in Bitcoin.

The issue began earlier today when the Stacks network encountered a delay in block production. The Stacks Status Twitter (aka X) account, the official channel for network updates, attributed the problem to a combination of factors.

"We are experiencing a delay in Stacks block production due to unexpected mining behavior combined with a Bitcoin reorg," the tweet stated. "Core developers in the ecosystem are investigating the issue and working to resolve it as quickly as possible."

The Bitcoin blockchain occasionally undergoes reorganizations, where previously confirmed blocks are invalidated. While uncommon, these events can disrupt applications and scaling networks built on top of Bitcoin, like Stacks.

In this case, Stacks network backers say the Bitcoin reorg is part of the reason that the network went down for about nine hours. Developers are also reportedly continuing to monitor miner activity to prevent similar disruptions in the future.

"Unexpected miner behavior" may refer to miners not updating their software or coordinating effectively in response to a Bitcoin reorganization, causing delays in block production, and implies technical or operational issues among miners.

The nine-hour block production stoppage impacted trading of the STX token. The token price plummeted by 12% on the day, to a current price of $1.90, reflecting investor concern about the network's stability.

While the disruption highlights the potential vulnerabilities of blockchain networks built on top of Bitcoin, the Stacks team says it’s committed to improving network resilience.

Stacks co-creator Muneeb Ali pointed out that the upcoming Nakamoto upgrade, which focuses on a new consensus mechanism, is designed to eliminate the possibility of forks and mitigate the impact of Bitcoin reorganizations.

The Nakamoto upgrade was previously expected to go live in late spring, but was delayed at the last minute due to potential issues that were deemed too severe to address in a later update. Now it’s set to roll out in August.

Decrypt reached out to Ali for comment but did not immediately receive a response.

Edited by Andrew Hayward