This year we have seen crazy growth in the Bitcoin ecosystem. First was Bitcoin Ordinals, followed by the wave of BRC 20 tokens sweeping across the market. However, Casey Rodarmor, the publisher of the bitcoin protocol Ordinals, believes that BRC 20 tokens constitute a “garbage pile” on the Bitcoin network. Therefore, Casey is researching to launch Runes Protocol – a new method of issuing tokens on the Bitcoin network. So what is Runes Protocol? Let’s find out with Weakhand in this article.
Before jumping into the article, you can read some of the following articles to understand better.
- What is BRC 20? All you need to know about BRC 20
- What is Bitcoin Ordinals? Everything about Bitcoin Ordinals
What is Runes Protocol?
Runes Protocol is a token issuance protocol on the Bitcoin network. Bitcoin Ordinals founder Casey Rodarmor proposed the new protocol in September 2023 as a better and simpler alternative to the current BRC 20 standard. This proposal has attracted the attention and heated discussion of the Bitcoin user community.
What is Runes Protocol?
Although this proposal is still subject to some controversy, in general the Bitcoin community has responded very enthusiastically to this new protocol. Trevor Owens of BTC Frontier Fund has offered a $100,000 grant to the public issuance team. indexing tool for Runes Protocol.
A few days later, Luminex – a Launchpad platform for Bitcoin Ordinals projects – also responded to this movement by launching a token issuance tool based on the Runes Protocol, allowing users to create their own Rune tokens. However, Casey later said that the Runes Protocol is not yet complete and is expected to be launched during the upcoming Bitcoin having period.
How Does Runes Protocol Work?
Each token issued using the Runes Protocol will be identified with the following fields: symbol, token supply and number of decimal. Tokens will be assigned to a specific UTXO, allowing a single UTXO to contain any number of tokens be it 1 billion, 1 million or less.
The UTXO is used to track the token balance per wallet address, and the Transfer function is used to split the UTXO into multiple new UTXOs containing different amounts of Runes and send them to the recipient.
Regarding data storage, unlike the Bitcoin Ordinals protocol, it allows data to be stored in the witness section of each transaction on the Bitcoin network. Runes Protocol stores data in OP_RETURN – a special function used to store data on the Bitcoin blockchain. This factor also brings many differences between Runes Protocol and Bitcoin Ordinals.
What Difference Does Rune Protocol Offer When Compared To BRC 20
BRC 20 is becoming extremely explosive at the present time, this trend has spread throughout the major Blockchains in the market, not just Bitcoin. However, some Bitcoin developers are unhappy with BRC 20 creating a surplus of Unspent Transaction Output (UTXO) on the Bitcoin network.
UTXO represents the amount of Bitcoin remaining after each transaction is made, essentially acting as the balance of Bitcoin in each user’s wallet address. Each Inscriptions transaction requires as input and output a separate UTXO number. In contrast to the Runes Protocol, the token balance will be held by a UTXO and each transaction output can contain any number of Runes tokens. This will avoid the widespread excess of UTXOs on the Bitcoin network and in my opinion, Runes Protocol also becomes more flexible and lighter compared to BRC 20.
Will Runes Protocol Become a New Trend?
Runes Protocol is currently at a crossroads. On one hand, it provides a simpler yet more efficient alternative to BRC 20, solving the problem of token inefficiencies that BRC 20 is facing. But on the other hand, rapid adoption of the Runes Protocol also brings about community impulsivity, affecting long-term sustainability.
Although Runes Protocol undeniably offers a promising solution for token creation on the Bitcoin network. Their simple, effective design stands in stark contrast to the inefficiencies of BRC 20 and some other token issuance protocols in the Bitcoin ecosystem such as RGB or Taproot Asset. The appearance of Runes Protocol promises to not only bring revenue from transaction fees, developer participation, and also solve the problem of spam the Bitcoin blockchain is facing. However, whether it can explode in the future will depend greatly on the support of the community in the near future.
summary
Overall, Runes Protocol offers a more flexible and efficient token issuance solution on the Bitcoin network than the currently popular BRC 20. Above is all the information I want to introduce in this article. I hope everyone has useful knowledge about Runes Protocol.
