What Are Bitcoin SRC-20 Token Standard?

Cryptocurrency is constantly developing, and SRC-20 tokens are the latest buzz in the Bitcoin industry. These tokens are similar to the special elements that give Bitcoin new abilities, particularly Bitcoin Stamps.

Is 2023 heralding a significant focus on token standards within the cryptocurrency sphere? A prominent occurrence is the introduction of the SRC-20 standard within the Bitcoin blockchain, drawing parallels with Ethereum’s renowned ERC-20. 

This adoption of SRC-20 is perceived by many as a pioneering step, infusing a fresh facet into digital art and tokens on the Bitcoin network, and amalgamating innovation with established practices. Similar to the well-known token standard BRC-20, this development prompts considerations about its implications for the future of Bitcoin and digital assets.

Impact of SRC-20 Token Standard on Bitcoin

The SRC-20 token standard was developed specifically to generate and oversee tokens, notably Bitcoin Stamps, within Bitcoin’s blockchain. SRC-20 facilitates the incorporation of information into Bitcoin transactions, much like the BRC-20 standard, albeit with distinct methods of embedding data.

Bitcoin Stamps, also recognized as SRC-20 tokens, essentially represent digital collectibles housed on Bitcoin’s blockchain. Initially, they utilized the Counterparty protocol to convert images into encoded files for dissemination across the Bitcoin network.

Benefits of SRC-20 Token Standard

Distinguishing itself through its utilization of unspent transaction outputs (UTXOs) rather than witness data for storage, Bitcoin Stamps stand out. UTXOs resemble the leftover balance from a Bitcoin transaction.

The emergence of SRC-20 tokens has significantly broadened Bitcoin’s functionality, shifting it from a mere store of value to a more versatile platform. Nevertheless, this evolution has ignited debates, with some perceiving it as a departure from Bitcoin’s original intent as conceptualized by Satoshi Nakamoto.

SRC-20 tokens need to adhere to specific criteria for their proper creation. They can encode only specific image file formats and are restricted to a maximum size of 24×24 pixels. Each Bitcoin Stamp necessitates a unique identifier and is formed by appending “stamp:base64” within a new transaction.

Despite concerns regarding their impact on blockchain size and transaction fees, SRC-20 tokens are gaining popularity. They are seen as a driving force behind the enthusiasm for non-fungible tokens (NFTs) within the realm of Bitcoin and are deemed more secure and immutable compared to other standards due to their non-prunable nature. Noteworthy SRC-20 tokens encompass PEPE SRC, KEVIN, STAMP, and SATO.

What Are Bitcoin Stamps?

Bitcoin Stamps, identified as SRC-20 tokens, represent a variant of NFTs integrated with the Bitcoin blockchain. They signify an expansion of the blockchain’s role beyond just being a decentralized financial system.

These tokens are integral to a nascent framework known as Secure Tradeable Art Maintained Securely (STAMPS), which facilitates the inclusion of various data, such as digital artworks, directly within Bitcoin transactions. This advancement broadens the scope of the Bitcoin blockchain, evolving it from merely a repository of value to a platform capable of supporting diverse applications.

SRC-20 tokens draw inspiration from both Ordinal Inscriptions and the Counterparty protocol. Ordinal Inscriptions, introduced in January 2023, enable the inscription of digital content onto the Bitcoin blockchain. Meanwhile, Counterparty, a peer-to-peer platform built upon Bitcoin, was employed to issue NFTs by burning Bitcoin.

The distinctive feature of SRC-20 tokens lies in their method of embedding data into the blockchain. They encode image data, in formats like GIF, PNG, or SVG, into a base64 string, integrating it into the description key of the transaction. This approach of storing data directly in transaction outputs renders SRC-20 tokens immutable and permanently affixed to the blockchain, making them impossible to remove.

The technology underpinning SRC-20 tokens has been likened to ERC-1155 tokens on Ethereum, known for their capability to manage both fungible and non-fungible tokens within a single transaction. 

However, SRC-20 tokens possess unique attributes that set them apart. Due to their high expense and the necessity for block space, they can only accommodate small images (24×24 pixels). This limitation contrasts with Ordinal inscriptions, which can handle larger data sizes.

Comparison Between Bitcoin Stamps and Bitcoin Ordinals

Bitcoin Stamps and Bitcoin Ordinals present two distinctive methods for embedding information within the blockchain, each offering unique traits and functionalities.

Difference between Bitcoin Stamps and Bitcoin Ordinals

Bitcoin Stamps

▪️ Technical Integration: Bitcoin Stamps are directly incorporated into the Unspent Transaction Output (UTXO) set of the Bitcoin blockchain, ensuring the data becomes an enduring and immutable aspect of the blockchain ledger.

▪️ Data Permanence and Security: Their unalterable nature ensures data permanence, with Bitcoin Stamps persisting indefinitely on the blockchain, thereby bolstering security and establishing trust.

▪️ Impact on Blockchain Efficiency: Engineered to occupy minimal space, Bitcoin Stamps have minimal effect on the overall efficiency and scalability of the Bitcoin network.

▪️ Applications and Use Cases: Bitcoin Stamps are well-suited for scenarios necessitating prolonged data integrity, such as legal documents, certificates, and historical records.

▪️ Legal and Regulatory Compliance: Their permanent nature establishes high reliability, making Bitcoin Stamps a dependable choice for compliance with legal and regulatory standards.

Bitcoin Ordinals

▪️ Technical Implementation: Ordinals entail embedding data onto individual satoshis. However, this approach is contingent upon node discretion, potentially leading to data pruning for performance optimization, which could result in data loss over time.

▪️ Data Permanence and Security: Concerns arise regarding the long-term security and reliability due to the potential for data pruning in Ordinals.

▪️ Impact on Blockchain Efficiency: Embedding data on individual satoshis might cause blockchain bloat, potentially impeding network speed and affecting transaction processing times, thereby raising scalability concerns.

▪️ Applications and Use Cases: While Ordinals offer a distinctive method to label and trace satoshis, their potential impermanence renders them less suitable for applications where sustained data integrity is paramount.

What are the Technical Specifications of SRC-20 Tokens? 

▪️ Protocol Foundation: SRC-20 tokens operate using the Bitcoin Stamps protocol, a departure from the previously utilized Counterparty protocol. This alteration enables direct data embedding within Bitcoin transactions, presenting a distinctive method in contrast to other standards like BRC-20.

▪️ Data Storage Approach: A key attribute of SRC-20 tokens involves their storage within unspent transaction outputs (UTXOs). This method ensures the permanent storage of data, such as images and text, on the blockchain, rendering it impossible to prune.

▪️ Token Attributes: SRC-20 tokens have the capability to encode JPG, GIF, PNG, or SVG files. In addition, the encoded files are limited to a maximum size of 24×24 pixels. 

Apart from that, each Bitcoin Stamp requires a numerical and unique identifier. The minting process of SRC-20 tokens entails converting an image to text, encoding it as a Base64 file, and prefixing “Stamp:” before the text. Subsequently, this encoded file is broadcasted to the Bitcoin network for validation and recompilation back into the original image.

Furthermore, SRC-20 transactions involve encoding a “STAMP:base64” string within the description key of a transaction. These tokens can be decoded directly from the original Bitcoin transaction.

▪️ Impact and Considerations: SRC-20 tokens are frequently likened to Ethereum’s ERC-1155 token, as both facilitate the efficient transfer of fungible and non-fungible tokens. Nonetheless, SRC-20 is specifically tailored for the Bitcoin blockchain and possesses its distinctive traits.

SRC-20 tokens necessitate substantial block space and resources, leading to increased costs. This is especially applicable to larger files employing a multi-sig option for data storage.

Meanwhile, the introduction of SRC-20 tokens is part of the broader trend of integrating token economies into Bitcoin. This transition offers fresh opportunities for traders but also engenders challenges and discussions, notably surrounding blockchain space utilization and the impact on transaction fees.

What Lies Ahead for SRC-20 Tokens?

The Bitcoin community is engaged in a lively discussion about the future of Bitcoin and its relationship with SRC-20 tokens. These tokens have introduced a fresh layer of innovation onto the Bitcoin blockchain, enabling the secure inclusion of data within Bitcoin transactions. While similar to the BRC-20 standard, SRC-20 tokens employ distinct methods for embedding data.

This advancement has diversified Bitcoin’s capabilities, expanding its role from solely a store of value to a multifaceted platform with various potential applications. Despite being in their early stages, SRC-20 tokens show promise in advancing the efficiency of the Bitcoin ecosystem.

Nevertheless, they might encounter resistance from Bitcoin maximalists who prioritize maintaining the original ethos of the Bitcoin blockchain amidst these new advancements. Such resistance could spark debates and divide the community regarding the direction of Bitcoin’s future.

A notable advantage of Bitcoin Stamps lies in their permanence within the blockchain, residing directly in spendable transaction outputs, thus immune to pruning. This characteristic ensures the long-term preservation of these digital assets.

The increasing popularity and rapid growth of Bitcoin Stamps indicate a rising interest in novel digital collectibles and the potential expansion of Bitcoin’s functionalities. Developments in SRC-20 tokens and Bitcoin Stamps may redefine our understanding and interaction with blockchain technology, potentially leading to broader adoption and innovative applications within the digital asset sphere.


The SRC-20 standard, tailored for Bitcoin Stamps, distinguishes itself with distinctive data embedding methods, diverging from the BRC-20 standard. Bitcoin Stamps, categorized as digital collectibles under SRC-20, initially utilized the Counterparty protocol to embed data in Bitcoin transactions. This technology leveraged unspent transaction outputs (UTXOs) for permanent and unchangeable storage on the blockchain.

Despite the rising popularity of SRC-20 tokens and their contribution to fueling NFT excitement within the Bitcoin realm, the utilization of these tokens to advance Bitcoin’s capabilities has sparked debate among the crypto community. Some perceive this transition as a departure from the original vision set by Bitcoin’s creator, Satoshi Nakamoto.

To learn more about the SRC-20 Token Standard, go check out SunCrypto Academy.


Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. All content provided is for informational purposes only, and shall not be relied upon as financial/investment advice. Opinions shared, if any, are only shared for information and education purposes. Although the best efforts have been made to ensure all information is accurate and up to date, occasionally unintended errors or misprints may occur. We recommend you do your own research or consult an expert before making any investment decision. You may write to us at [email protected].

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