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  1. Introduction
  2. Satochain Blockchain

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

Components
Runes
BRC-20 Tokens

UTXO-based

✔

✘

Ordinals Theory-based

✘

✔

Token Type

Fungible

Fungible

On-chain Footprint

Minimal

High

Lightning-Compatible

✔

✘

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Last updated 1 year ago

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