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(DO employee here) It's S3-compatible. Agreed that it's a bit strange in Transmit and other clients to have to first select "S3" when connecting to something else entirely... but that's the world we live in.

Spaces isn't working with Transmit 5 yet. I don't have the technical details, but it's a known issue that's being worked on. I'll write a Transmit 5 tutorial as soon as it works.

Unfortunately the s3 API has become a common thing with blob storage services/software.

It means they can support any apps/services that currently rely on s3 without little more than a s3 host/URL change.

A lot of storage services have S3 compatible APIs. Minio, Google Cloud Storage (when in interop mode) also can be accessed with S3 libraries/SDKs (you have to change the endpoint for it to work).

And they aren't 100% compatible. I believe that DO doesn't support headObject, bucketExists and creating presigned upload URLs.