Ordinals creator Casey Rodamor is launching yet another protocol on Bitcoin.
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Key Takeaways
Bitcoin’s ecosystem is expanding as Runes now makes it possible to mint fungible tokens on Bitcoin.
The new protocol, created by Casey Rodamor, aims to solve the inefficiencies of Ordinals.
Bitcoin Runes will launch this week on block 840,000, coinciding with the Bitcoin Halving.
Bitcoin Ordinals creator Casey Rodamor has launched a new protocol for minting fungible tokens onto the Bitcoin network called Runes.
With the intent of bringing greater flexibility, innovation, and solutions such as decentralized finance (DeFi) and non-fungible tokens (NFTs) to the Bitcoin blockchain, Runes could be the ‘next big thing’ for crypto, or just another tech bubble.
One for Memecoins and the Degens
Amid a memecoin frenzy, Rodamor took to social media on April 1, 2024, to announce Runes. Which could have easily been perceived as nothing more than a classic April Fool’s joke. Fortunately or unfortunately, depending on your perspective, the post was legitimate.
Runes were built for degens and memecoins, but the protocol is simple, efficient, and secure. It is a legitimate competitor to Taproot Assets and RGB.
The protocol is self contained and has no dependencies on ordinals or inscriptions, making it extremely simple.
Runes is a new fungible token standard launched on Bitcoin. It’s a spiritual successor to the BRC-20 standard introduced with Ordinals last year and aims to improve upon some of its shortcomings.
Seemingly, this creation brings classic crypto degeneracy and memecoins to the once-conservative Bitcoin network.
The launch of the Ordinals protocol allowed for the creation of non-fungible token-like (NFT) “inscriptions” on Bitcoin. After that, a wave of BRC-20 standard tokens made their way onto the market.
OXT merges art and Bitcoin through Ordinals, showcasing the potential of the Bitcoin ecosystem with a blend of creativity and technology. With a skilled team, @OrdinalXTribes aims to innovate in the Bitcoin art space.
Although BRC-20 and other fungible token protocols for Bitcoin such as Taproot Assets, RGB, and others, have brought new possibilities to the network, they weren’t easy to use, understand, or efficient.
As per a blog post outlining the intent of Runes, Rodamor notes that Ordinals have “undesirable consequences of Unspent Transaction Output (UTXO) proliferation” on Bitcoin. This surplus “junk” left over clogs up the network, resulting in higher transaction fees and network congestion.
Etching With Runes
Now, the process of creating Runes, or “etching”, allows users to create governance rules and unchangeable attributes within the Rune.
The Ultimate Runes Glossary
Rune: A fungible token on Bitcoin (for example a memecoin or a utility token)
Etch: How a Rune comes into existence (once set these properties are immutable)
Rune Name: The unique ticker for a Rune that can consists of the letters A through Z and…
They also have an optional pre-mining capability where the “etcher” can receive a preset number of Runes before launching them publicly.
Runes can either have an open or closed minting process. Open minting on a Rune lets anyone who meets pre-determined conditions to create new tokens. Closed minting only allows for the creation under certain parameters such as block height or token threshold.
Once minted, a Rune is transferred from a transaction input to output using an instruction called “edict”. In short, this is a message that determines how a rune should be transferred, allowing users to make batch transfers, airdrops, and other features.
So What’s the Big Deal?
The success of Ordinals saw miners rake in some $256 million in revenue through transaction fees. But again, Ordinals were seemingly a novelty lacking any practicality, and were a good, but not perfect, attempt to reinvigorate the Bitcoin network.
As stated on a February episode of his podcast, Hell Money, Rodamor says:
“I’m creating a venue for people to create shitcoins,”
Runes intends to achieve the same, although with a significantly smaller on-chain footprint, one that is sustainable and can actually result in the creation of new utility tokens on Bitcoin.
“I’m not sure creating a new fungible token protocol for Bitcoin is a good idea. Fungible tokens are 99.9% scams and memes”
He also notes that creating a good protocol that can function as the foundation for brilliant projects could “bring significant transaction fee revenue, developer mindshare, and users to Bitcoin”.
While it might not happen overnight, or even this year, Runes could, potentially, push the envelope just a little further into unknown territories.
With the Bitcoin Halving just days away, discussions of supply shock, and major sell-offs amongst miners, Runes may rejuvenate optimism around the future of the Bitcoin network.
Eddie is a gaming and crypto writer at CCN. Covering the often weird and wonderful world of Web3 with an adoring, but skeptical eye.
Prior to CCN, Eddie has spent the past seven years working his way through the crypto, finance, and technology industry. He began with PR and journalism with Bitcoin PR Buzz and BitcoinNews.com, eventually working his way to become a copywriter with a dozen firms, including the likes of Polkadot before returning to journalism in 2023.
Having studied Radio production and journalism at University in the UK, Eddie spent a few years making podcasts and presenting on a local London radio station as he built up his writing chops.
A lifelong skateboarder, Eddie can often be found at the skatepark or touring the streets looking for something new to try. That, or kicking back playing JRPGs on his original PSP.
