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Imagine embedding data like art directly onto Bitcoin transactions. That’s the power of SRC-20, a new standard for creating tradable “Bitcoin Stamps.” Unlike similar ideas (think BRC-20), SRC-20 takes a unique approach. It’s inspired by colored coins (differentiating crypto units) and Counterparty (a Bitcoin-based P2P platform).
Similar to Ethereum’s ERC-20 tokens, SRC-20 lets you create tokens on Bitcoin, expanding its uses beyond just storing value. This innovation sparks debate, with some arguing it strays from Bitcoin’s original purpose.
This article dives into SRC-20, how it compares to others, and how it works. We’ll also explore how to get your hands on these digital stamps.
Colored Coins and Ordinals
Colored coins were the early birds that never quite learned to fly. While this idea of attaching data to Bitcoin transactions didn’t gain mainstream traction, it paved the way for later innovations like BRC-20 and, ultimately, SRC-20. This means SRC-20 owes a debt to colored coins, even though they didn’t achieve the same level of success.
Colored Coins: Paving the Way for Innovation
Imagine Bitcoin with extra baggage tags! That’s the idea behind colored coins. By attaching special data (metadata) to regular Bitcoin, colored coins aimed to make Bitcoin usable for things beyond just money. While colored coins themselves never quite caught on, they sparked a wave of innovative ideas, including SRC-20.
Bitcoin Ordinals: Inscribing on the Original Ledger
Fast forward to 2023, and Bitcoin Ordinals burst onto the scene. Created by programmer and artist Casey Rodarmor, Ordinals allow you to etch digital content directly onto the Bitcoin blockchain. Think of it as a permanent record for your digital art or collectibles, stored on the same blockchain that underpins Bitcoin itself.
Ordinals work by giving individual satoshis (the smallest units of Bitcoin) unique identities. This lets you add meaning to them, transfer them, and track their movements. It’s a different approach compared to Ethereum’s NFTs, which rely on smart contracts. Ordinals use the BRC-20 standard, where data is embedded into the inscriptions themselves.
Since their launch, Ordinals have gained significant traction. The first BRC-20 token, ORDI, started as a joke but quickly became popular, paving the way for others like MEME, VMPX, and PEPE.
Bitcoin Stamps: Permanent Storage for Digital Assets
Created by Mike In Space, Bitcoin Stamps offer a unique way to store data like text and images directly on the Bitcoin blockchain. This permanence is achieved by leveraging UTXOs (unspent transaction outputs), the core building blocks of Bitcoin transactions. Unlike BRC-20s and Ordinals, where data can potentially be altered, Stamps prioritize immutability, ensuring your digital assets are safe from censorship or limitation. This focus on data security fueled the development of ORC-20 (ensuring compatibility) and, ultimately, SRC-20, the current champion of on-chain data immutability.
Next up: We’ll explore the key differences between SRC-20 and BRC-20 tokens.
Bitcoin Stamps: Behind the Scenes
Imagine tiny mailboxes living on the Bitcoin blockchain, each capable of holding bits of data like text or images. That’s the essence of Bitcoin Stamps! Here’s a simplified look at how they work:
Building on a Legacy: Stamps leverage the Counterparty protocol, a peer-to-peer system built on Bitcoin. Users “burn” a small amount of Bitcoin to create a Stamp, similar to paying a fee.
Packing It In: Stamps can hold up to 80 bytes of data directly. For larger files, they get cleverly split and stored across multiple “mailboxes.”
From Image to Code: To store an image, Stamps convert it to a special code and broadcast it onto the Bitcoin network. The network validates and reassembles the code, bringing your image back to life.
The Future of Bitcoin Stamps: Potential and Pitfalls
Bitcoin Stamps are a fresh innovation, and their future holds exciting possibilities. Developers are likely to create tools that streamline the process and unlock new use cases that drive wider adoption.
However, there are also potential hurdles to consider. Currently, buying Stamps feels a bit like downloading a large image in pieces – it’s not the most user-friendly experience. Additionally, the way Stamps store data uses a significant amount of Bitcoin block space. This could lead to a “hard fork” in the future, where the Bitcoin network splits into two versions.
The Bitcoin community is known for its passionate purists who view Bitcoin primarily as a store of value. They might resist the idea of Bitcoin becoming more like other cryptocurrencies with added functionalities. If the push for Stamps continues, it could create a rift within the community.
Overall, Bitcoin Stamps offer a fascinating glimpse into the future of Bitcoin. Whether they become mainstream or not, they represent a step forward in exploring new ways to utilize the Bitcoin blockchain.
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