Sprite mask
A separate one-bit image in the shape of the sprite that punches a hole in the background before the sprite itself is dropped into it.
It comes down to two bitwise operations per byte. First AND with the mask, which has zeros where the sprite is and ones around it, clearing exactly the pixels the sprite will cover. Then OR with the sprite to fill the hole. The result is an arbitrarily shaped object over an arbitrary background, without the rectangular fringe a plain copy leaves behind.
The mask doubles the memory per sprite and roughly doubles the drawing time. A colour key avoids the mask but needs a comparison per pixel, which only pays off when a pixel is a whole byte. On bitplane machines like the Amiga and Atari ST, masking was therefore the norm, and on the Amiga the blitter did it in a single pass.