Overview
The Bitcoin Manual article introduces SRC-20 tokens and the related STAMPS protocol as recent experimental attempts to enable token-like assets and tiny NFTs on the Bitcoin base layer. Emerging from the Ordinals wave and borrowing concepts from older projects like Counterparty, STAMPS propose an alternative embedding method that stores data directly in the UTXO set, making these artifacts difficult or impossible to prune. The write-up frames the trend as part technical curiosity and part market speculation, outlining both mechanics and the economic incentives that have driven rapid adoption in some niches.
Core Capabilities
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Permanent storage in the UTXO set: STAMPS place data into spendable transaction outputs so that the data persists in the UTXO until the output is spent, which makes it much harder to prune than witness-based inscriptions.
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Two embedding options: Small payloads can use OP_RETURN (for under ~80 bytes), while larger files use a fake multi-signature approach that stores file bytes in what looks like multisig keys, enabling bigger in-chain artifacts.
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Support for token-style minting (SRC-20): SRC-20 builds a token standard around the STAMPS approach, enabling issuance and transfer semantics for fungible tokens and tokenized fractions of media.
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Fractionalized NFT use cases: STAMPS proponents suggest lightweight pixel art (e.g., 24×24, 8-color PNG/GIF) be split into sellable slices, enabling fractional ownership models on Bitcoin.
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Counterparty heritage: The protocol borrows design and conceptual inspiration from Counterparty, reusing ideas about embedding metadata without burning BTC or issuing an altcoin.
How STAMPS Work
Technically, STAMPS rely on standard Bitcoin transactions but craft outputs so that file data is embedded either in an OP_RETURN or within the structure of a bare multi-signature output. For files larger than the OP_RETURN limit, the multi-sig trick treats non-key bytes as data, producing outputs that appear to be multisig on-chain but actually encode STAMP content. Because these outputs are part of the UTXO set, their encoded data remains available to full nodes until the UTXO is spent. SRC-20 leverages this storage method to register token metadata and simple transfer actions.
Differences vs Ordinals and Inscriptions
STAMPS differ from Ordinals/Inscriptions in several important ways. Ordinals typically store data as witness data under Taproot and can be pruned by nodes that drop old witness data, while STAMPS sit in spendable outputs and are thus not easily prunable. STAMPS are generally more resource-intensive and costly to create and transfer, because they consume more block space. Ordinals benefit from SegWit discounts and simpler transaction constructions, making them cheaper for many use cases. STAMPS can also be destroyed if the UTXO they rely on is spent, adding a lifecycle consideration that differs from inscription permanence assumptions.
Use Cases, Integrations, and Risks
Proposed use cases for STAMPS include fractional pixel-art NFTs, collectible tokens that claim permanence, and niche markets where higher minting cost is seen as a virtue. The STAMPS developer has discussed integrations with wallets and marketplaces to enable easier buying and selling, but tooling remains nascent. Important risks include increased on-chain resource usage and fee pressure, potential conflicts with traditional Bitcoin transactions, and the speculative nature of markets that reward novelty rather than utility. The article cautions readers to do independent research and highlights the speculative incentives that often drive rapid adoption of novel token standards.
Recommendation
The article presents STAMPS and SRC-20 as technically interesting but economically and operationally contentious. For users seeking low-cost, flexible NFTs on Bitcoin, Inscriptions (Ordinals) are likely a cheaper option. For those exploring permanence and a different set of trade-offs, STAMPS/SRC-20 merit experimentation, but the piece repeatedly emphasizes caution: these are experimental standards, they may impose costs on the network, and the primary driver of adoption so far has often been speculation rather than long-term utility.
Conclusion
STAMPS and SRC-20 represent a continuation of attempts to run token economies on Bitcoin by reusing creative transaction construction. They highlight meaningful trade-offs—immutability vs. cost, storage permanence vs. network efficiency, and speculative demand vs. practical utility. As with other token experiments on Bitcoin, the article urges readers to research thoroughly, understand the technical implications, and proceed with skepticism regarding market hype.
