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SRC-20 Tokens

Intermediate
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What Is the SRC-20 Token Standard?

SRC-20 tokens are a type of tokens that leverage Bitcoin Stamps technology to attach data to Bitcoin. This standard enhances the functionality of the Bitcoin network, enabling the creation of fungible assets. It is akin to the BRC-20 token standard, although there are notable distinctions between the two. Now, let's delve into the workings of SRC-20 tokens.

How Do SRC-20 Tokens Function?

By employing Bitcoin Stamps to embed data into unspent transaction outputs (UTXOs), SRC-20 tokens ensure immutable data storage. This capability allows for the creation of tokens that operate in parallel with Bitcoin's native coin, with transaction fees paid in BTC, while offering comparable functionality to other token standards such as BRC-20.

BRC-20 vs. SRC-20

While both BRC-20 and SRC-20 token standards enhance the utility of the Bitcoin blockchain, they rely on differing methodologies. Let's explore the key variances between BRC-20 and SRC-20.

Data Storage

SRC-20 tokens utilize the Bitcoin Stamps protocol, enabling the storage of information directly on UTXOs within the Bitcoin blockchain. In contrast, BRC-20 tokens utilize the Bitcoin Ordinals protocol, which stores information in the witness data. While details within the witness data can be modified by a syncing mode, Bitcoin Stamps data cannot be pruned.

Data Pruning

Data associated with SRC-20 tokens stored on UTXOs cannot be pruned, ensuring immutability and enduring existence. Conversely, data attached to Bitcoin ordinals can be pruned by nodes, potentially impacting data longevity.

Transaction Costs

SRC-20 tokens facilitate flexible data storage, enabling creators to attach data of various sizes. However, larger data sizes lead to higher transaction fees. In contrast, BRC-20 tokens impose constraints on information size, ensuring standard transaction costs. Additionally, BRC-20 token data is stored in the Witness section of a transaction, contributing to lower transaction costs.

Adoption

BRC-20 tokens have garnered broader adoption, being listed on centralized exchanges, and multiple protocols are developing technologies to embrace them. On the other hand, SRC-20 tokens are still in their early stages, with limited wallet and protocol integration.

Conclusion

The SRC-20 token standard enhances the utility of the Bitcoin blockchain, enabling the creation of fungible assets through the use of Bitcoin Stamps technology. While sharing resemblances with the BRC-20 token standard, the SRC-20 standard employs a distinct method of data storage within the Bitcoin blockchain.

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