What are Bitcoin Stamps and SRC-20 Tokens?

Bitcoin Stamps are the digital images stored on the Bitcoin blockchain with the help of the SRC-20 token standard.

Bitcoin, the bedrock of cryptocurrency, isn't just about transactions anymore. Since its inception, BTC evolved to provide more use cases, and the emergence of Stamps is one such prominent example. Stamps solved the Bitcoin community's major concerns about Ordinals related to immutability, security, and network congestion.

Moreover, the SRC-20 token standard helps to conduct transactions directly on the Bitcoin blockchain.

In this article, we will explore Bitcoin Stamps, SRC-20 tokens, and more.

What are Bitcoin Stamps?

Bitcoin Stamps uses a Secure Tradeable Art Maintained Securely (STAMPS) protocol to add digital images directly to the Bitcoin blockchain. By doing so, users can mint ‘NFTs’ and expand the use case of Bitcoin to a wide range of applications.

Mike In Space, a developer and artist, introduced the Bitcoin Stamps. To make these assets immutable and permanent, he stored the metadata of the original image within the unspent transaction outputs (UTXOs).

Source: X

Moreover, the Stamps protocol uses the Counterparty protocol as a tool to transmit the total text data directly to the Bitcoin chain. In addition, using the stamp: prefix and base64 encoding mechanism help to gain recognition as a Pay-to-Script-Hash (P2SH) transaction.

Simply put, P2SH (Pay-to-Script-Hash) lets users design Bitcoin transactions that unlock funds only when a specific set of conditions, written in a script, are met.

How Do Bitcoin Stamps Work?

The image data of the Bitcoin Stamps are converted into a special encoded file format called base64. Stamps embed the data into the Bitcoin transactions without keeping the digital images on a separate server.

The metadata of the original image is stored within the multi-signature unspent transaction outputs (UTXOs) to make these Stamps immutable and permanent.

In addition, every Bitcoin Stamp is assigned a unique number based on the transaction on the Bitcoin network. This arrangement helps to position the Stamps in chronological order.

Moreover, each Bitcoin Stamp possesses a valid image string, "STAMP:base64," in its description key. Transactions lacking image strings or containing invalid image strings cannot be recognized as legitimate Bitcoin Stamps.

Bitcoin Stamps vs Bitcoin Ordinals

Bitcoin Stamps and Bitcoin Ordinals allow users to inscribe additional data on the Bitcoin network. While similar, they are not identical.

Stamps offer a compelling solution to the limitations faced by Ordinals, ensuring lasting permanence, heightened security, and a lighter footprint on the network.

Immutability

Bitcoin Stamps store the digital image data on the transaction outputs, which restricts the chance of witness data modification using a process of data pruning.

On the other hand, as Bitcoin Ordinals store files in the form of witness data, there exists a possibility for data pruning.

Efficiency

Bitcoin Stamps use minimal storage space, so they don't affect the efficiency of the Bitcoin network.

In contrast, Bitcoin Ordinals inscribe data on individual satoshis that have the potential to slow down the Bitcoin network and impact the transaction speed.

Security

Bitcoin Stamps use multi-sig, where digital signature creation includes combining multiple unique signatures to enhance security.

On the contrary, Bitcoin Ordinals operate using a single signature system that is less secure in nature.

How to Buy Bitcoin Stamps?

We'll go through the steps to buy Bitcoin Stamps from OpenStamp. You can follow these simple steps:

• Step 1: Visit the openstamp.io platform and choose Stamps from its marketplace.
• Step 2: Then choose your preferred Bitcoin Stamp from the listed collection.
• Step 3: Next, connect your Unisat, OKX, or Leather wallet with OpenStamp.
• Step 4: Click on the price tag of your selected Stamps.
• Step 5: On the next pop-up window, you can verify your order price, network fee, and market fee.
• Step 6: Double-check your total price in BTC and then click "Confirm."
• Step 7: Lastly, confirm your wallet transaction along with the desired transaction speed.

Once you complete all these steps, you'll receive your Bitcoin Stamp in your wallet.

What are SRC-20 Tokens?

SRC-20 tokens are created using the Stamps protocol on the Bitcoin blockchain. This token type is inspired by Ethereum's popular token standard, ERC-20.

As the image data is inscribed into the Bitcoin blockchain's transaction outputs, the SRC-20 token offers immutable data storage. As a result, these tokens run parallel with the native cryptocurrency, Bitcoin.

SRC-20 tokens can be used to encode files with GIF, SVG, PNG, and JPG formats with a maximum file size of up to 24×24 pixels. To mint these tokens, you need to pay the fees in BTC.

At present, the top three SRC-20 tokens are STAMP, BITDN, and KEVIN. STAMP has over 4,300 valid holders, whereas BITDN and KEVIN have approximately 2,300 holders each.

Source: Stampscan

In addition, at the time of writing, the market cap of the top ten SRC-20 tokens is valued at over $100 million. Out of which, STAMP itself contributes around $55 million to the total market cap.

How to Buy SRC-20 Tokens?

The process of buying SRC-20 tokens is almost similar to that of buying any other crypto tokens from decentralized exchanges like Uniswap.

Here, we'll use Stampscan to understand the steps for buying SRC-20 tokens.

• Step 1: Visit Stampscan and choose your favorite token from this platform. For example, here, we'll select the KEVIN token.
• Step 2: After clicking the KEVIN token details, you can pick your token based on your budget.
• Step 3: Next, connect your wallet to the platform. Stampscan only supports Unisat, Leather, and OKX wallets for buying SRC-20 tokens.
• Step 4: After connecting the wallet, click "BUY."
• Step 5: Next, you need to pay the total fees, which include the price of the token, platform fee, and miners fee. Then click "Confirm buy."
• Step 6: Authorize the wallet confirmation.

Finally, after confirming your transaction, you'll receive your KEVIN token in your connected wallet. Ensure to keep the required BTC in your wallet before buying the SRC-20 tokens.

Conclusion

The future of Bitcoin Stamps completely depends on its adoption by the crypto community. The immutable and secure nature of Stamps helps artists create their digital collections with a long-term vision. In addition, Bitcoin Stamp's advantage over Ordinals gives Stamps an upper hand in the crypto space.

Along with Stamps and SRC-20 tokens, the Bitcoin ecosystem opens the door to extending its limited applications. Moreover, this innovation can expand its presence and empower new sectors like real estate, web3 gaming, and more.

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