What are Stamps on bitcoin?
The Ordinals protocol, created to use inscriptions (artifacts), quickly gained popularity and was soon followed by new formats such as BRC-20, SCR-20, and Stamps.
What is Stamps, and what functions does it perform?
Stamps is a new protocol based on the Bitcoin blockchain that allows image data in base64 format to be added directly to the leading cryptocurrency's decentralized network. Stamp translates to "seal," which very accurately symbolizes the essence of the protocol: data is embedded in the blockchain in a text format that resembles a seal.
Stamps were initially developed as an improved version of the Ordinals protocol to provide more secure data storage on the blockchain and facilitate the creation, transmission, and validation of NFT on Bitcoin. Stamps serve as a safe way to store digital assets on the Bitcoin blockchain because it does not rely on external data stores, which are primarily points of vulnerability.
Stamps utilizes two standards on the bitcoin blockchain:
- SRC-20 is a standard for issuing fungible tokens (SRC-20) that embeds data directly into bitcoin transactions. SRC-20 simply allows the tokenization of assets (by adding inscriptions in bitcoin) — previously, complex platforms such as Stacks, which fully control the process of issuing digital assets and are Layer2 solutions, were used for this purpose,
- SRC-721 — a standard for issuing non-replaceable tokens (NFTs) in images. Unlike interchangeable tokens, such assets are indivisible and cannot be freely converted into each other.
Stamps allow you to compress image data, reduce its size, and combine multiple images into a single file, lowering transaction costs.
What can Stamps be used for?
The Stamps protocol has other uses besides storing images as NFTs. For example, It can also store documents on a blockchain. By using Stamps, it is possible to provide reliable confirmation that an author's work is authentic, as records on the Bitcoin blockchain cannot be altered or deleted.
Stamps also allow archives to be created and uploaded, ensuring data integrity through decentralized technology with no single failure point.
Protocols such as Stamps can be used, for example, to prove ownership since it is tough to unambiguously verify the source of origin for standard media files uploaded to the Internet.
In addition, Stamps can be helpful in other areas, such as virtual real estate (transfer of ownership), art, in-game assets, and more.
What are the differences between Stamps and other similar bitcoin solutions?
Stamps is very close to Ordinals regarding data storage format since it was developed based on it. However, they have two significant differences:
- First, the Ordinals protocol only stores a portion of the NFT data on the blockchain, which creates certain risks of manipulation and even loss of information. The developers of Ordinals have stated that they "don't want to embed a lot of useless information into bitcoin transactions on the blockchain." Stamps, on the other hand, add complete data to the blockchain;
- Second, Ordinals supports larger image sizes (up to 4MB), which is unavailable for Stamps.
In addition to Ordinals, Bitcoin still has BRC-20, SRC-20, and ARC-20, all of which are standards for fungible tokens (FT). Standards like BRC-20 are not protocols but simply describe the rules for creating tokens on the Bitcoin blockchain using inscriptions. They are also tied to satoshi — the minimum units of BTC.
Perspectives on Stamps
Protocols for issuing tokenized assets on the Bitcoin blockchain, such as Stamps, have been innovative and have caught the crypto community's attention. These protocols allow users to create and transfer tokens without relying on third-party solutions, adding inscriptions directly to the bitcoin blockchain.
However, it's too early to discuss the prospects of Stamps and similar solutions, as alternatives that could draw the community's attention to themselves may emerge. For example, bitcoin developers are preparing an update to BIP-347, a soft fork to empower the bitcoin smart contract. Implementing BIP-347 will expand the functionality of the bitcoin blockchain to issue tokenized assets and perform bilateral transactions with them.