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The rapidly evolving blockchain industry is giving rise to new token standards that expand the field’s horizons. The SRC-20 token is one such specification that has generated much interest recently.

Using the same Bitcoin transaction infrastructure, SRC-20 tokens provide a novel method of embedding data. This guide discusses how the SRC-20 token standard differs from BRC-20 and how it might affect the Bitcoin ecosystem.

Understanding SRC-20 Tokens

SRC-20 tokens, also called “Bitcoin’s nonfungible tokens (NFTs),” rely on the Bitcoin Stamps protocol. This protocol, inspired by Counterparty and colored coins, allows users to embed data in Bitcoin transactions, creating a platform for secure and tradeable art.

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While similar to the BRC-20 standard, SRC-20 tokens employ distinct approaches to data embedding. The development of SRC-20 tokens dates back to the concept of colored coins, which aimed to differentiate specific units of Bitcoin by adding metadata.

While colored coins did not gain significant traction, they inspired subsequent innovations such as the BRC-20 and SRC-20 standards. Bitcoin Ordinals, launched by Casey Rodarmor, further paved the way for SRC-20 tokens.

Built on the BRC-20 standard, Ordinals allowed the inscription of digital concepts onto the Bitcoin blockchain. However, SRC-20 tokens differ from Ordinals because they enhance data immutability, addressing concerns regarding censorship and limitations.

The Technology Behind SRC-20 Tokens

Before anyone can understand how SRC-20 tokens work, it is essential to explore their underlying technology. SRC-20 tokens utilize the Counterparty protocol, an open-source, peer-to-peer protocol built on the Bitcoin blockchain. The “OP_Return” function stores up to 80 bytes of data within a transaction and utilizes multi-sig via several outputs for larger files.

By converting an image to text and encoding it as a Base64 file, the protocol reconstructs the original image within the Bitcoin network.

Comparing Bitcoin Stamps To BRC-20 Tokens And Ordinals

Bitcoin Stamps enable direct data storage, such as text and images, within the blockchain using Unspent Transaction Outputs (UTXOs). This approach ensures permanent blockchain storage that is prune-proof, providing a distinct advantage over BRC-20 tokens and Ordinals, where interference with metadata seems possible.

Thus, the Bitcoin developers started researching ways to enhance these Bitcoin stamps. Their research led to the creation of tools like the SRC-20 and ORC-20. The former makes data immutability possible, while the latter ensures backward compatibility.

How SRC-20 Differs From BRC-20

The key distinction between SRC-20 and BRC-20 lies in their methods of embedding data. BRC-20 tokens rely on Ordinals, a protocol allowing the inscription of digital contents onto the Bitcoin blockchain.

On the other hand, SRC-20 tokens, through the Bitcoin Stamps protocol, store data directly using the Unspent Transaction Output (UTXO). This approach ensures prune-proof permanent blockchain storage, offering enhanced immutability compared to BRC-20 tokens.

For those interested in acquiring SRC-20 tokens, a step-by-step process is available on various sites. Such sites include and, and download the Hiro Wallet browser extension.

Furthermore, users can mint SRC-20 tokens on the Bitcoin blockchain. Thus, they contribute secure, tradeable art and other innovative use cases to the growing Bitcoin ecosystem.

The Future of SRC-20 Tokens

While the SRC-20 token development is still in its early stages, it holds tremendous potential to transform the Bitcoin ecosystem. As adoption increases, developers will likely create more tools and enhance the efficiency of the SRC-20 token ecosystem.

However, challenges may arise, including debates within the Bitcoin community regarding the direction of the technology. Nonetheless, the ability to embed data directly on the Bitcoin blockchain opens up countless opportunities for the future.

Final Thought

SRC-20 tokens represent an exciting development in the world of blockchain technology. With their unique approach to data embedding, these tokens offer enhanced immutability and the potential for new applications within the Bitcoin ecosystem.

As the technology continues to evolve, SRC-20 tokens can revolutionize Bitcoin transactions and shape the future of blockchain innovation.

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George Ward

By George Ward

George Ward is a crypto journalist and market analyst at Herald Sheets, known for his engaging articles on the latest digital currency trends. With a background in finance and journalism, he presents complex topics accessibly. George holds a degree in Business and Finance from the University of Cambridge.