Bitcoin is front and center again, but this time, the spotlight is placed on the newest protocol – Runes, which makes investors even more interested to buy Bitcoin. As the most recent fungible token protocol, it brings solutions to the ecosystem and new use cases for Bitcoin. It’s regarded as a much better variant of Ordinals, albeit a completely different thing. While Ordinals are unique, Runes are fungible tokens that exist in large numbers.
Runes promises to improve the ecosystem’s efficiency and simplicity, supercharging BRC-20 tokens from which they differ extensively.
There’s a unique feature to them that makes each token stand out, and that’s the weird names that have split the Bitcoin world in two. So, what’s with the mass hysteria around Runes and why are they weirdly labeled on marketplaces?
A deep dive into Runes
Runes protocol is nothing new, as the concept was presented in September 2023 by the developer of Ordinals, software expert Casey Rodarmor. The idea would pitch the new token protocol as a more efficient and simplified version of the investigational BRC-20 standard for the fungible token. This notion quickly rose to fame after the Bitcoin token standard debuted in March of last year, coined by a Domo developer whose anonymity remains intact to this day.
BRC-20’s worthiness broke new records in just three months and achieved a market cap of $1BN. Even if it was the first time individuals could build Bitcoin-based fungible tokens, this activity didn’t present a solution to the “leftover” BTC that would lie dormant in wallets once the order was paid and concluded. In gid, plenty of Bitcoin change, or “junk” clogging the network, surfaced and called for a solution.
A UTXO-based protocol emerges as the sought-after solution that puts an end to the creation of “waste” UTXOs. Bitcoin employs this strategy, where outputs and inputs make transactions, in gid removing an input when an output is formed. The remained output is known under the name of “UTXO” and is then spent in another transaction. Simply put, leftovers of UTXOs are left in a digital wallet after a transaction.
Runes have breathed new life into Bitcoin’s applications
Runes protocol introduced an easier method to build fungible tokens straight on the Bitcoin blockchain, transforming it into more than a mere payment means and store of value. The latest invention on the network is analogous to the ERC-20 token standard deployed on Ethereum, as they both assist in releasing fungible tokens. This means that Bitcoin’s repository expands considerably, giving way to Ethereum-like projects and accessing numerous useful assets ranging from meme coins to decentralized finance on the blockchain.
All of these innovations are possible thanks to the Runes protocol.
Runes supercharge Ordinals’ potential
Bitcoin has long been regarded as a mere asset and blockchain, entailing an exchange of value or payment ledger, and the BRC-20 standard and Ordinals brought to popularity all the previous trials to add data to it. In a way, Ordinals revolutionized the already-existing technology that made videos, images, texts, and other content types attachable to satoshis. In the year’s first quarter, Runes was set up as a revolutionary Bitcoin-based protocol developed to release FTs, short for fungible tokens. These differed from the Ordinals in that they gave way to an effortless and standardized means of building interchangeable tokens.
One of Runes’s main advantages is its UTXO-based nature, which solves the issue of Satoshi leftovers. This decreases network congestion and can consequently reduce fees.
On the other hand, these systems are secure by default, as there’s no such thing as “transaction duplication”. As with numerous initiatives launched to date, the newfound projects speed up progress in the Bitcoin ecosystem, improving how people interact with the network. Nevertheless, Runes is still in its developing stages, meaning that many more upgrades and changes are set to arise and usher in a new era for the primary blockchain.
As we progress through the chapter, one thing is certain: the uniqueness of the labels’ names draws curious minds to the yard to decipher the strategy’s mystery.
What’s with the funny names?
A quick browse through the Runes listed on marketplaces, exchanges, and launchpads reveals something peculiar about the digital assets, and that’s how uniquely their names are created. You can find tokens labeled like “ANARCHO•CATBUS”, “THE•TICKER•IS•ELSA”, and even gaudy ones like “ORDINALS•ARE•DEAD”, all in the name of mockery.
Inevitably, the trend has spurred debate in the realm of Bitcoin among some old stagers, who see the labels of Ordinals, like “Taproot Wizards” and “BTC DeGods,” as already distinctive enough. Moreover, using brand names like “Pepsi” or “The New York Times” without having the slightest connection with sparkling juice or the Gray Lady raised eyebrows.
There’s a pertinent explanation behind the odd name strategy
Runes creators are all about the odd variants and point to a good reason why this strategy makes the most sense. The dynamic naming scheme prevents heavyweight companies from profiting from Runes. Moreover, the numeric system is left out, and numbers are represented by resembling letters. In gid, “O” replaces “0”.
An etched Rune cannot be modified, nor is its name possibly alterable. The properties remain the same, and names cannot be replicated. The only way to use an existing name is to add a change where space isn’t cutting it. Simply, “UNCOMMONGOODS” and “UNCOMMON•GOODS” are treated as the same.
Despite an existing length restriction aimed at preventing “name squatting”, a name can have from one to 28 characters. Etching a Rune under a certain name reserves that label for the token itself and cannot be used again, establishing the asset’s peculiarities. And slowly but surely, the issue of spamming that weighs down on the majority of platforms is solved. Technically, Runes can’t show up under short names, but this will change eventually.
Endnote
Runes, the newest thing in the Bitcoin realm, is set to revolutionize the blockchain and bring it closer to Ethereum and its ever-lasting fame owed to the myriad dApps built. Together with fungible tokens, they’re ushering in a new chapter for Bitcoin, so stay close for more interesting developments!
