Overview
SRC-20 tokens and Bitcoin Stamps represent an emerging layer of functionality for the Bitcoin blockchain that goes beyond simple payments. Bitcoin Stamps is a protocol that embeds arbitrary data into Bitcoin’s UTXOs, creating a permanent, non-prunable record on-chain. Building on this foundation, SRC-20 tokens are a fungible token standard that stores token metadata—name, supply, and additional attributes—directly in those UTXOs, enabling minting, transfer, and trading of tokens secured by Bitcoin’s network.
Core Capabilities
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Immutable On-Chain Storage: SRC-20 tokens store metadata in UTXOs using the Bitcoin Stamps protocol, ensuring data permanence and resistance to pruning.
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Fungible Token Operations: SRC-20 provides mechanisms to create, mint, and transfer fungible tokens that coexist alongside BTC and leverage Bitcoin’s security model.
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Compatibility with Tools and Wallets: Platforms like Stampscan and OpenStamp, along with wallets such as Leather Wallet and Unisat, enable users to mint, view, and hold SRC-20 tokens.
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Flexible Data Capacity: Because data is written into UTXOs, larger metadata payloads (images, extended metadata) are possible, though this affects fees.
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Native Bitcoin Fee Model: Transactions that mint or move SRC-20 tokens pay fees in BTC, integrating token activity into native Bitcoin economics.
How They Work
SRC-20 tokens are minted by encoding a token’s parameters into a Bitcoin transaction using a Stamp marker (for example, a STAMP:base64 string). That transaction is included in a block and its UTXO entries persist on-chain. Unlike witness-based methods that store token data in prunable witness sections, this UTXO-based approach ensures token metadata is preserved for as long as the Bitcoin ledger exists. Tools such as Stampscan/OpenStamp parse Stamp-encoded transactions to present token registries and trading interfaces, while compatible wallets allow end users to hold and move tokens.
Potential Use Cases
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Digital Collectibles and NFTs: Artists can mint collections that are permanently anchored to Bitcoin, providing immutable provenance.
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DeFi and Tokenized Assets: SRC-20 can represent stablecoins, governance tokens, or other tokenized real-world assets used in lending, staking, or trading protocols.
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Community and Reward Tokens: Projects can issue tokens to reward participation, enable governance, or power access and discounts within ecosystems.
Benefits
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Security and Permanence: Data in UTXOs benefits from Bitcoin’s decentralization, immutability, and high-assurance security.
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Expanded Bitcoin Utility: SRC-20 opens Bitcoin to tokenization use cases previously dominated by smart-contract platforms, creating new financial and creative applications.
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Rich Metadata Support: The ability to store larger payloads allows high-resolution media and detailed token descriptors to be embedded on-chain.
Challenges and Limitations
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Higher Transaction Costs: Larger on-chain payloads increase fees, making small or frequent token operations expensive.
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Scalability Concerns: Bitcoin’s block capacity and throughput constrain large-scale adoption and may cause congestion.
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Limited Ecosystem Integration: Wallet and exchange support remains nascent compared with alternatives like BRC-20, limiting liquidity and usability.
How to Mint and Interact
- Choose a supported marketplace (e.g., Stampscan, OpenStamp).
- Set up a compatible wallet (e.g., Leather Wallet, Unisat) and fund it with BTC.
- Define token parameters and encode them as a Stamp transaction.
- Broadcast the transaction and confirm inclusion on the Bitcoin blockchain.
- Use the wallet or platform to view, trade, or transfer tokens.
Why Consider SRC-20 and Bitcoin Stamps
For creators, developers, and communities seeking the strongest assurances of permanence and Bitcoin-level security, SRC-20 tokens present a compelling option. They align token data durability with Bitcoin’s design principles and enable new kinds of digital ownership and financial instruments. However, decision-makers should weigh the cost and integration trade-offs against these benefits.
Future Outlook
Wider adoption will hinge on better tooling, wallet and exchange support, and improvements in layer-2 or protocol-level efficiency to manage fees and scalability. If the ecosystem matures, SRC-20 and Bitcoin Stamps could substantially expand Bitcoin’s role as a platform for tokenized assets, digital art, and community-driven economic models.


