The Runes Protocol, launching in late April, is set to transform the Bitcoin landscape with a new fungible token standard.
Developed by Casey Rodarmor, the creator of Bitcoin Ordinals, Runes marks his latest innovation on the Bitcoin network.
Bitcoin Ordinals enable the data to be directly embedded onto individual Satoshis – the smallest denomination of Bitcoins.
However, the current token standard for Bitcoin assets, BRC-20, has a drawback. It creates excess “junk” in the form of Unspent Transaction Outputs (UTXOs) that can clutter the network and lead to slower, less reliable and more expensive transactions.
This is where Runes comes in. The Runes Protocol aims to optimize how digital assets are created, managed, and transacted on the Bitcoin network by introducing a more efficient token standard that minimizes network congestion and enhances transaction speeds.
How does Runes Protocol work?
The Bitcoin Runes Protocol employs a UTXO-based protocol, using unspent Bitcoin fragments – essentially digital loose change – to create new transactions.
By tracing each Bitcoin back to its origin, the protocol ensures the authenticity and uniqueness of every asset, providing users with confidence that what they hold or receive is genuine and legitimate.
Rather than rely on off-chain data or specialized tokens, Runes Protocol makes full use of Bitcoin’s capability for on-chain data storage. This significantly reduces the accumulation of “junk” UTXOs, clearing the network for more efficient operation.
Furthermore, the protocol uses the OP_RETURN function to store data on-chain – essentially adding a secret note to a Bitcoin transaction without making any changes to the Bitcoin itself. This keeps transactions efficient, minimizes network strain, and should improve overall user experience.
If that wasn’t enough, Runes Protocol is also compatible with the Lightning Network, an additional layer atop Bitcoin that facilitates quicker and cheaper transactions.
Why should I care about Runes Protocol?
Alongside the technical advancement, Runes is a gateway to a broader blockchain audience, owing to its ability to facilitate a larger volume of tokens and thereby attract more participants.
Pre-Runes NFT project Runestone has already generated buzz by airdropping Ordinals to early Bitcoin adopters, hinting at the expansive reach and impact Runes will likely have.
According to data from CoinGecko, Runestone has quickly gained traction, with a 24-hour trading volume of approximately $513,000 USD (7.27 BTC) and a robust market cap of $707 million USD (10,026 BTC). That’s impressive, especially considering these Ordinals assets were only initiated last month.
Further demonstrating the impact of the new protocol, Bitcoin Pups has seen its price soar by 1094.15% to $46.93 USD in the past week, fueled by excitement surrounding its upcoming shift from the BRC-20 standard to the Runes Protocol.
Other Bitcoin Ordinals projects, like NodeMonkes, Taproot Wizards, and Ordinals Maxi Biz are also on the rise owing to the enhanced functionality and efficiency that Runes looks to bring.
How do I prepare for Runes Protocol?
As the Runes Protocol nears launch, here’s what you can do to reap the most benefit:
- Create a Runes-compatible Bitcoin wallet; Magic Eden’s ME Wallet is a widely-recommended choice
- Acquire Bitcoin, the essential currency for engaging with the Runes Protocol and covering transaction fees
- Follow Casey Rodarmor and the Runes community on social media for the latest updates
Rodarmor’s development of the Runes Protocol marks a significant advancement in optimizing Bitcoin’s scalability and functionality, and may redefine how Bitcoin assets are managed, interacted with, and enjoyed. Get involved!
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