First Runes-based Blockchain
The Runes protocol, launched in September 2023, is a groundbreaking addition to the Bitcoin ecosystem, characterized by its simplicity and efficiency. Conceived by Casey Rodarmor, also known for creating the Ordinals protocol, Runes introduces a method for issuing fungible tokens directly on the Bitcoin blockchain. This development enables the creation and management of tokens that are both interchangeable and divisible, much like ERC-20 tokens on the Ethereum network.
Runes distinguishes itself from other Bitcoin fungible token protocols by eliminating the reliance on off-chain data or the necessity for a native token. It achieves this by embedding token data into specific UTXOs (Unspent Transaction Outputs), which are designated as 'Rune-bearing.' Key token information, such as supply, issuer details, and metadata, are efficiently stored in compact ‘OP_RETURN’ outputs linked to the Rune-bearing UTXO. The transfer of a Rune-bearing UTXO conveys both the Bitcoin value and the associated token to the new owner, who then verifies the token's authenticity and updates their ledger.
Key Features
Simplicity: The Runes protocol aligns with Bitcoin's foundational principles, aiming for minimal complexity. Unlike Ordinals, Runes addresses blockchain size and transaction fee concerns by attaching token data to pre-existing UTXOs, effectively reducing data expansion.
Efficiency: Utilizing UTXOs for token management significantly enhances transaction processing. This method represents a substantial leap in scalability compared to the method of wrapping Bitcoin into tokens on other chains.
Interoperability: Designed to integrate flawlessly with current Bitcoin wallets and tools, Runes is committed to a user-friendly experience. This seamless integration reduces barriers for users, encouraging broader adoption by enabling them to easily merge Runes into their existing Bitcoin operations.
Runes vs. BRC-20 Tokens
UTXO-based
✔
✘
Ordinals Theory-based
✘
✔
Token Type
Fungible
Fungible
On-chain Footprint
Minimal
High
Lightning-Compatible
✔
✘
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