Bitcoin is front and center again, and orange coin lovers everywhere have plenty to be excited about: new all-time high prices, the upcoming halving, rising demand for Ordinals—and soon, something totally new called Runes.
And while Runes won‘t hit Bitcoin until the halving—currently set for April 20 as of this writing—when the supply of newly minted BTC is once again cut in half by slashing miner rewards, the project is already getting a lot of hype and attention. Here’s what you need to know.
What are Runes？
Runes is a new protocol from the mind behind Ordinals, Casey Rodarmor. With Ordinals, the Bitcoin developer made it possible to create NFT-like “inscriptions” on the Bitcoin network—and this, in turn, made it possible to trade jpegs for magic internet money right on the grandaddy chain.
Rodarmor, in an interview with TechCrunch, described his Ordinals “theory” as a “lens that you can view the Bitcoin blockchain through, and when you view it through that lens, these trackable satoshis pop into view like Pokémon in the tall grass.” So, in this sense, Runes similarly represent a new lens through which to view Bitcoin—but this time, with shitcoins.
The Runes protocol picks up where BRC-20s left off. BRC-20 is a fungible token standard, which itself makes use of the Ordinals protocol and was developed by the pseudonymous dev domo. Runes is an attempt to make the process of creating fungible tokens on Bitcoin more efficient.
How do Runes work？
Whereas Ordinals or inscriptions are non-fungible tokens—unique identifiers meant to house data like collectibles, art, or trading cards—BRC-20s and Runes are fungible tokens. Fungible simply means theyre interchangeable, like the dollar bills you no longer have in your wallet because all money is digital now anyway.
Like BRC-20s, Runes will use Bitcoin and pay fees in Bitcoin to create new tokens. The key difference between Runes and BRC-20s is that Runes, like Bitcoin itself, uses an Unspent Transaction Output (UTXO) model, as opposed to an account model—the same model used by some layer-1 chains such as Ethereum.
Many Bitcoiners believe the UTXO model to be superior, and that using the account model is one of the reasons Ethereum falls short. Rodarmor himself believes the UTXO model to be superior because, among other reasons, other token standards tend to rely on off-chain data, whereas Runes will be completely on-chain.
When does the Runes protocol launch on Bitcoin？
Rodarmor has timed the launch of Runes to the Bitcoin halving. This means that both the Runes protocol and the various “runes” tokens being built on the protocol will go live when Bitcoin reaches a block height of 840,000. This is currently expected to happen on April 20.
The “halving” refers to an event that‘s hard-coded into the Bitcoin protocol and occurs roughly every four years. It’s meant to keep Bitcoins inflation rate in check, and historically, this event has been viewed as a bullish indicator and often brings a lot of eyes to Bitcoin. After all, a shrinking supply and growing demand is how “number go up.”
