What are the Runes in Bitcoin?
Runes, a new standard for tokens in Bitcoin, makes it simpler and more efficient to create tokens that are fungible on the blockchain.
The Key Takeaways
- Runes, a protocol for creating fungible coins on the Bitcoin Blockchain.
- Runes simplifies the management and creation of fungible coins by using Bitcoin’s UTXO and the OP_RETURN opcode.
- The Runes project will increase Bitcoin’s efficiency in relation to tokens that are fungible, and expand the Bitcoin network to appeal to more people by making the creation of meme coins easier.
- The most popular Rune, based on market capital, is RSIC*GENESIS*RUNE. It has a cap over $325,000,000.
In the last two years, Bitcoin has developed to include both fungible and unfungible tokens. The market capitalization of these tokens has already exceeded Two billion dollars The network generated millions of dollars in revenue from the miners. There is a lot of excitement around the Runes token protocol, which will revolutionize token creation on Bitcoin.
The protocol was designed for memecoins and degens. It is efficient, simple and secure. This is a real competitor of Taproot Assets, RGB and other similar services.
It is extremely easy to use because the protocol does not depend on any ordinals or inscriptions.
The balances of the…
Casey (@rodarmor). April 1, 2024 After the third Runes, a new release was made. Bitcoins halvingThe launch took place in April 2024. The Rune that has the highest marketcap is RSIC (RSIC*GENESIS*RUNE), with over $325 millions based on OKX Data. On the 20th April, when Runes was launched, Bitcoin transaction costs reached new highs. The average fee for a transaction exceeded $127.
BitInfoCharts
Understanding Bitcoin Runes
Casey Rodarmor is the inventor of the Ordinals protocol, which allows users to create NFT like inscriptions in the Bitcoin blockchain. He has now released Runes, an entirely new protocol, that enables users to easily create tokens atop Bitcoin, such as Solana or Ethereum. The underlying technology is still a work in progress. BRC-20 You can also find out more about the following: SRC-20 Token standards exist. They are based upon the Ordinals Theory, and can lead to UTXOs that spread Bitcoin.
To create a more healthy way to etch tokens onto the Bitcoin network Rodarmor announces Runes for September 2023 Since then, he has worked on it. There is a growing interest in Runes as the launch date of the protocol approaches.
The creation of a good token protocol could bring Bitcoin significant revenue from transaction fees, developers’ mindshare and more users.
Casey Rodarmor is the creator of Runes
Bitcoin Runes is set to launch after the Bitcoin halves in April 2024, on Block 840,000. It is important to note that this arrangement has no bearing on the functioning of the protocol. However, it does add to the excitement surrounding the 4th Bitcoin halving. Rodarmor claims that Bitcoin Runes simplicity and architecture will help the main reason for the development of the protocol – creating fungible tokens in the Bitcoin blockchain.
Franklin Templeton is a big part of the excitement surrounding Runes. Statement:
The fungible Bitcoin token market is currently quite small compared to ETH or SOL. However, the new token standard Runes will help Bitcoin to narrow the gap in its fungible capitalization versus other blockchains.
Bitcoin Runes, or tokens on the Bitcoin Blockchain are created. The executable data allows for specified assets to created and spend on the network. Like BRC-20 or SRC-20, Runes rely upon the Bitcoin Blockchain to function. However, they are simpler and not dependent on ordinals. They are also healthier and more efficient. Runes is also different from other existing Bitcoin fungible token protocol, as it does not depend on off-chain information, such as RGB or Taprot Assets. It will be more efficient and healthier than both of these token standards, adopting key (existing) models like the UTXO model and the OP_RETURN opcode.
Let’s now take a look at the Bitcoin Runes in more detail;
Bitcoin Runes: How they Work
Understanding the Bitcoin Runes Protocol requires two terms.
- Bitcoin’s UTXO transaction model
- You can also find out more about the following: OP_RETURN Opcode
The aforementioned is a UTXO (Unspent Transaction Output) In the transaction model, a total amount in the ledger of a user is used for every transaction. The algorithm then calculates the balance, after the tokens have been transferred to the receiver. Each UTXO may contain any quantity of Runes.
You can also find out more about the following: OP_RETURN opcode Users can add extra data to Bitcoin transactions, without affecting the efficiency of the network. The OP_RETURN opcode allows Bitcoin users to attach up to 80 bytes to a transaction that is not spendable. The data contains information on the token including its name, the ID, the symbol, the command to perform specific actions, and any other data required. Runes messages are stored within the OP_RETURN section of a Bitcoin Transaction. They can be referred as Runestone.
Depending on the Runes transaction, multiple operations can be specified across various Runes. If a token is transferred, Runes will divide the UTXO based on instructions contained in OP_RETURN. The UTXOs represent different token amounts, and are sent to the recipients.
The Runes are burned if a Rune Transaction fails because of an invalid Protocol Message. This prevents any Runes from being created accidentally.
Bitcoin Etching and Minting: Runes, Etching and Emulation
Rune creation is a process. Etching. In the OP_RETURN, users who want to etch a Rune can specify its name, symbol and ID. They may also include parameters related to generation and distribution. In the “etching” process, creators can include a premine. This is where the Rune will be allocated to them before the Rune becomes available to everyone else.
Open or closed mints are available after etching. Anyone can mint Runes after initial etching. They simply need to create a mint transaction. Closed mints allow new tokens to be created only when certain conditions have been met. For example, a time limit after which minting is stopped, effectively capping token supplies.
The Edicts describe how Runes are transferred following etching and minting. The edict feature allows for batch transfers, airdrops, and the transfer of all Rune minted to one account.
Bitcoin Runes: Possible Symbol Squatting
To keep it simple, the Runes Protocol will not restrict symbol squatting. Squatters are able to hold on to desired symbols of any size, using the alphabet A-Z. Rodarmor proposes solutions such as only assigning symbols of a length above a specific length at launch. The length will then decrease over time. OrdiscanThe first rune with three characters will be released about three years after that.
Bitcoin Runes: Benefits
The Runes project aims to make it easier for users and the Bitcoin network to create fungible coins on the blockchain. It also focuses on other objectives such as reducing on-chain footprints and improving UTXO (United Transactions) management. Take a look at the many benefits that Runes can bring users and to the Bitcoin network.
Simplicity
Bitcoin Runes will offer an easier way to create fungible coins on the Bitcoin Network, compared to alternatives such as BRC-20 RGB and Taproot. Runes allows users to create and manage multiple tokens on the blockchain without relying on native tokens or off-chain information.
Resource Efficiency
BRC-20 has been described as a costly way to create and manage tokens in Bitcoin. Its mode of operation leads to a proliferation of UTXOs. Bitcoin is currently battling an influx UTXOs which will never be used. The network is impacted by this, which can cause performance problems. Bitcoin Rune’s design prevents this. OP-RETURN doesn’t generate UTXOs which cannot be used and storage parameters use less resources. The OP_RETURN opcode only takes up 80 bytes compared with BRC-20 inscriptions that have a memory of 4MB. This makes better use of Bitcoin’s network resources.
Integrating Bitcoin’s UTXO Model
Bitcoin uses the UTXO Model to manage user assets. Rodarmor claims that Bitcoin Runes also inherits this design. Bitcoin Runes can be used with UTXO facilities. Bitcoin Runes’ spending model sets it apart.
Increased user base
According to its creator, Bitcoin Runes are primarily used as a ‘fun currency’ and’meme coin’. Meme coins have attracted interest from mainstream investors and crypto natives as a new strategy for building communities. The creation of meme coins using Ordinals and BRC-20 has attracted many new Bitcoin users.
Bitcoin Runes has already attracted the attention of the meme coin community, since meme coin projects are the most popular pre-launch project. The Bitcoin network may welcome new users who are interested in trading these meme coins, pending the launch of the Bitcoin system. Increased network use and an expanding user base will increase the network’s revenue and encourage more miners.
Bitcoin Network Expanded Usefulness
Different protocols for creating tokens in the Bitcoin Blockchain create a new utility. The Bitcoin network will expand as Rune projects introduce their own strategies. These projects’ innovative capabilities will determine the expansion.
Bitcoin Runes Ecosystem
Existing projects will also expand into the Runes eco-system when the protocol is launched. These projects are going to interact with the protocol directly to create Bitcoin assets, while other will provide utilities for Bitcoin Runes fans. These are the types of projects joining the Bitcoin Runes eco-system.
Tokens
Rune Pups is one of the fungible tokens projects that are using the Bitcoin Runes Protocol to add a rune in the Bitcoin network. Other projects include Runevo Runestone and RSIC. Currently, the majority of these NFTs are earning Runes until the Runes Protocol goes live. Runestones holders will receive three meme coins via airdrop.
Launchpad
Bitcoin Runes Launchpads offer Rune Projects a way to get started. The first of these is the Launchpad for Bitcoin Runes. Bitcoin RuneThis gives users an idea of the possibilities that platforms such as these can offer Bitcoin Rune project. Bitcoin Rune, which is still in its testnet phase will allow projects to run various operations such as Rune transfers. Bitcoin Rune also features a marketplace, where new and existing Bitcoin Rune project can begin trading.
Markets
Several marketplaces support Bitcoin Runes and allow users to trade, list or buy them. OKX offers a trading platform for Runes where users can buy and sell Runes such as RSIC or SATOSHI*NAKAMOTO. NFT Platform Magic Eden There is also a new section on Bitcoin Runes. This includes a Pre-Rune Section for projects that have not yet launched. Whales MarketA Pre-market Platform Users can use this platform to trade TGE allocations (Token Generating Event) of Bitcoin Rune project.
The wallets
Bitcoin Runes can be minted directly on the Bitcoin blockchain but require a specific application for managing assets. Users can make use of wallets such as XverseTo manage Bitcoin Runes, users can use a program that also supports BRC-20.
Bitcoin Runes and BRC-20
The Runes protocol, like BRC-20 allows tokens to be created on the Bitcoin Blockchain. BRC-20 is based on the Ordinals protocol, a technology which allows for data to be added to each Bitcoin sat. Bitcoin Rune is an improved version of this design. It uses less resources on the Bitcoin Network. Both designs have key differences in terms of asset creation, daily operation and adoption. BRC-20 has a significant first-mover’s advantage. This is a comparison of BRC-20 and Bitcoin Rune
Last Thoughts
Bitcoin Runes adds a new token-issuance system to the Bitcoin network. Although the original network was not designed to do this, it’s refreshing to see that the oldest modern model of blockchains is getting more exciting. Many projects have already started building communities to prepare for the individual launch. Bitcoin Runes’ model is interesting, as it uses some of the older features to create what could be a significant new addition for the entire space. The Bitcoin network is seeing more and more adoption as the hype grows. Although it is unclear what impact this will have on mainstream investors, native crypto enthusiasts would benefit from more Bitcoin use cases.
It is also important to remember that Bitcoin Runes are still in their early stages of development and, like all new products, they can be subject to changes in key aspects and fluctuations in performance. At the time this article was written, projects that use Bitcoin Runes and join its ecosystem were also considered highly speculative. Do your research prior to investing in any cryptocurrency. Note that the article discusses Bitcoin Runes only from a technological standpoint. This article is intended for educational purposes only and shouldn’t be construed as financial advice. The featured projects have not been endorsed.
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Joel Agbo
Joel has a deep interest in the technology behind blockchains and cryptocurrencies. In the over seven years he has been involved in this space, Joel helps startups create a stronger online presence by writing content. He is the founder of CryptocurrencyScripts. Twitter: Follow the author @agboifesinachi