Key Points:
- Innovation for Bitcoin: Runes offers an innovative alternative to BRC-20 tokens, reducing “junk” clutter on the Bitcoin network.
- UTXO-Based Approach: Runes leverages UTXOs to seamlessly integrate with Bitcoin and promote responsible UTXO management.
- Value Addition: Developing a robust fungible token protocol like Runes could boost transaction revenue, attract developers, and expand Bitcoin’s user base.
Casey Rodarmor, the mind behind Bitcoin Ordinals, is presenting an alternative to the BRC-20 token standard in the form of a new fungible token protocol called “Runes.” He argues that Runes would be less burdensome on the Bitcoin network compared to BRC-20 tokens, which tend to clutter it with unwanted “junk.”
New terrible idea just dropped: Runes.
A worse-is-better fungible token protocol for Bitcoin.https://t.co/TPVrUvWxm8
— Casey (@rodarmor) September 25, 2023
The BRC-20 standard, introduced in March by an anonymous developer known as “Domo,” rapidly achieved a market cap of $1 billion within two months. Notable BRC-20 tokens like PEPE and ORDI were launched on the Bitcoin platform.
BRC-20 allows for the creation and transfer of fungible tokens using the Ordinals protocol on the Bitcoin network. However, the drawback of BRC-20 tokens is their tendency to create excessive “junk” Unspent Transaction Outputs (UTXOs) within the Bitcoin ecosystem, according to Rodarmor.
Rodarmor pointed out the “undesirable consequence of UTXO proliferation” in a post dated September 25, proposing Runes as an alternative approach based on UTXOs. He stated, “Protocols that are UTXO-based integrate more seamlessly with Bitcoin and encourage the responsible management of UTXOs by avoiding the generation of unnecessary UTXOs.”
TLDR on Runes – A potential fungible token protocol for Bitcoin
ᚱᚢᚾᛖᛊ
– Casey remains skeptical, citing “99.9% are scams and memes,” but recognises they don’t appear to be going away.
– Employs a UTXO-based system, notably simpler than BRC-20.
– Uses the letter ‘R’ in the… https://t.co/zYP43f70gh— Franken (@ItsFranken) September 25, 2023
He added, “If this protocol maintains a minimal on-chain presence and promotes responsible UTXO management, it could potentially serve as a harm reduction measure compared to existing protocols.”
UTXOs represent the remaining cryptocurrency in a wallet after a transaction is completed. This balance is used in subsequent transactions and is stored in the UTXO database. Bitcoin’s UTXO model plays a vital role in ensuring the transparency and auditability of the Bitcoin ledger by preventing double spending.
Rodarmor acknowledged that other fungible token protocols on Bitcoin, such as Really Good for Bitcoin, Counterparty, and Omni Layer, also have their own issues. Despite admitting that 99.9% of fungible tokens are associated with scams and memes, he believes that the right fungible token protocol could bring added value to the Bitcoin network. He stated, “Developing a robust fungible token protocol for Bitcoin could potentially generate significant transaction fee revenue, attract developer interest, and increase the user base for Bitcoin.”
During a Twitter Spaces session with Trevor Owens, co-host of The Ordinals Show, on September 25, Rodarmor mentioned that he had conceived the idea for Runes just the previous week and was uncertain whether he would pursue it further.
Shortly after the discussion, Owens proposed offering $100,000 from the Bitcoin Frontier Fund to potential developers who could create a functional Rune application, aiming to advance Rodarmor’s proposal.
Open $100k investment offer in upcoming @BTCFrontierFund accelerator for first team who can get a working (not terrible) Rune indexer, issuance and/or transfer app, up live and running
Don’t make the tickers required to be unique, will be a shit show
DM me. Serious offer. pic.twitter.com/6W0IwlhB9x
— trevor.btc (@TO) September 26, 2023
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