SRC-20

Overview

SRC-20 is a token standard built on Bitcoin that leverages the Bitcoin Stamps protocol to embed token data directly into UTXOs (unspent transaction outputs). By inscribing data in a way that avoids witness-field pruning, SRC-20 tokens achieve long-term immutability and permanence on the Bitcoin blockchain. The standard enables token creators to convert image and metadata into Base64 and store it in transactions, which supports digital collectibles, simple fungible tokens, and novel on-chain artifacts that rely on Bitcoin’s security model.

Core Capabilities

• 1. On-chain immutability: SRC-20 stores token data inside UTXOs via the Stamps protocol, which prevents typical pruning and preserves metadata permanently.
• 2. Embedded media support: The standard accepts common image types like JPG, PNG, GIF, and SVG, enabling visual collectibles and tokenized imagery to live on Bitcoin.
• 3. Base64 encoding and unique identifiers: Data is encoded in Base64 and each token/stamp has a unique numerical identifier, ensuring tokens are distinct and recoverable from transaction data.
• 4. Compatibility with Bitcoin wallets and fees: SRC-20 transactions are broadcast and validated by the Bitcoin network, with fees paid in BTC, and require compatible wallets for minting and custody.
• 5. Fungible and collectible use cases: While SRC-20 commonly represents fungible tokens, the Stamps mechanism also facilitates collectible and NFT-like experiences by embedding unique image data.

How SRC-20 Works

The SRC-20 workflow starts by encoding token metadata and images in Base64 and placing that data into a specified key (often a description field) of a Bitcoin transaction. The Stamps protocol ensures that metadata is written into UTXOs rather than witness data, protecting it from pruning and making it permanently recoverable. Each minted token receives a numerical identifier; transactions are then broadcast to the Bitcoin network for validation. Because storage is on-chain, size limits (e.g., very small images like 24x24 pixels) are typically enforced to keep costs manageable.

Use Cases and Practical Considerations

SRC-20 opens several practical use cases:

1. Digital collectibles and micropixel art that remain anchored to Bitcoin.
2. Simple fungible tokens that coexist with Bitcoin’s native currency but serve different app-layer functions.
3. Permanent archival of small pieces of media or metadata for provenance and historical records.

Practical constraints include on-chain storage costs, image size limitations imposed by many implementations, and the need for tooling and wallets that support SRC-20 minting and discovery. Transaction fees are paid in BTC, so minting activity is tightly coupled to Bitcoin’s fee market.

Comparison with BRC-20

SRC-20 differs from BRC-20 (Ordinal-based tokens) mainly in storage and permanence. SRC-20 leverages UTXO-based Stamps to ensure non-prunable storage, while BRC-20 depends on Ordinals and witness data that can be subject to pruning. SRC-20’s emphasis on permanence trades off with stricter size limits and potentially higher fees; BRC-20 and Ordinals offer different trade-offs in terms of data size, mutability, and current market adoption.

Why SRC-20 Matters

SRC-20 broadens Bitcoin’s role beyond a pure monetary settlement layer by enabling secure, permanent tokenization directly on-chain. For creators and collectors who value immutability and provenance, SRC-20 provides a compelling path to store small media and token metadata in a way that leverages Bitcoin’s security guarantees. As infrastructure, wallets, and marketplaces mature, SRC-20 could become a significant component of Bitcoin-native NFTs, collectibles, and lightweight tokens, complementing other standards while emphasizing permanence and on-chain authenticity.

Recommended Next Steps

If you’re interested in SRC-20, explore Stamp-focused tooling, seek wallets that support Stamps and SRC-20 minting, and consider the cost implications of on-chain storage. For projects prioritizing permanence and Bitcoin-native provenance, SRC-20 is worth evaluating alongside BRC-20 and layer-2 alternatives.