Runes: The New Bitcoin Standard That Might Replace BRC-20

Runes: The New Bitcoin Standard That Might Replace BRC-20

By SimpleSwap | SimpleSwap Blog | 11 Jun 2024


The dawn of the new millennium has been marked by technological advancements that have revolutionized how we handle information, data, and resources, fundamentally transforming our way of life through the rise of the Internet. The crypto industry epitomizes this shift – blockchain technology, introduced in 2008, has undeniably split our history into "before" and "after." 

Now, in this era of constant innovation, a new player has entered the tech scene: Runes. Is it a nod to ancient times overtaking modern progress, or just another crypto meme? Spoiler alert – it's neither. Let’s dive into the Runes protocol and see how it might shape Bitcoin’s future.

What are Runes?

Runes are like this fresh breeze blowing through the world of Bitcoin. It's a brand-new standard for fungible tokens, shaking things up as an alternative to BRC-20. And guess who's the brain behind it? None other than Casey Rodarmor, the whiz behind the Ordinals protocol.

BTC Runes were officially launched on April 20, 2024. And they are here not to steal BRC-20's thunder. It's more like a cool upgrade – a shiny evolution of the standard introduced by Domo back in March 2023. Think of it as giving your favorite video game a major update with new features and smoother gameplay. That's what Runes bring to the table. Casey Rodarmor is confident that Runes can turbocharge transactions, making them way more efficient than before. 

The Advantages of Runes

Runes builds on the technical foundation of BRC-20, but with several key improvements:

  1. Simplified token creation. Runes makes it easier and more efficient for users to create fungible tokens on the blockchain.
  2. Autonomous operation. Unlike Ordinals, Runes operates independently, addressing the UTXO (Unspent Transaction Output) bloat issue.
  3. Technical enhancements. The protocol includes features that simplify transactions and reduce blockchain load.
  4. UTXO and Lightning Network support. Runes directly supports Bitcoin’s UTXO model and allows transactions over the Lightning Network.

The 'Runestone': Bitcoin's Smart Contract

At the heart of the Runes system is the OP_RETURN command, which attaches additional data to Bitcoin transactions. 

In a Runes transaction, a special message called a "runestone" is included. This message contains several lines of code that define or modify the parameters of a new token, similar to how Inscriptions work in Ordinals.

Using OP_RETURN, users can execute various operations by inputting standardized code templates:

  • Etching. Sets the basic parameters of a new asset.
  • Minting. Creates a specified number of tokens according to predefined rules.
  • Transferring. Moves assets from one address to another.
  • Burning. Destroys a specified number of tokens using special commands.

In the Runes system, the runestone functions like a smart contract on Ethereum, automating certain tasks without additional user input and recording it on the blockchain as part of a standard transaction. In contrast, BRC-20 requires users to manually track a separate labeled output for similar purposes.

How to Use Runes

Interacting with Runes isn’t as straightforward as using conventional Bitcoin wallets. Standard wallets lack the capability to display the additional transaction data and aren't designed for the new standard’s interface.

To conduct transactions with runestones, a specialized tool is needed, such as the Xverse service from Bitcoin Web3. The Xverse wallet is available as a mobile app or browser extension and supports multiple token standards on the Bitcoin network, including Runes, Ordinals, and Stacks. Other wallets that support the Runes protocol include UnisatWallet and OKX.

You can trade tokens created with the Runes standard on specific marketplaces like:

  • UniSat. Initially a trading service for Ordinals, now supporting Runes infrastructure.
  • OKX Web3. A marketplace from the OKX crypto exchange that supports Runes and Inscriptions.
  • MagicEden. Originally the largest NFT marketplace in the Solana ecosystem, now a cross-chain platform for trading NFTs.

Conclusion

The emergence of Runes marks a significant milestone in the ongoing evolution of the Bitcoin network. By addressing the limitations of the BRC-20 standard and offering enhanced features like simplified token creation, autonomous operation, and support for the UTXO model and Lightning Network, Runes presents a promising alternative that could reshape how fungible tokens are managed on the blockchain. The proactive involvement of wallets and marketplaces in supporting Runes highlights the industry's readiness to embrace innovation.

Casey Rodarmor's track record with Ordinals and now Runes reflects a commitment to pushing the boundaries of what's possible with Bitcoin. As the Runes protocol gains traction, it’s poised to become a crucial component in the crypto ecosystem, paving the way for more efficient and versatile blockchain applications. This development underscores the dynamic nature of the crypto space and its potential for continuous improvement, making the future of Bitcoin and blockchain technology all the more exciting.

If you want to learn more interesting facts about crypto then check out our blog! You might like our articles “Bitcoin Runes Explained” and “Comparing the Current Crypto Bull Run to Historical Trends”.

The easiest way to buy, sell or exchange coins is to use SimpleSwap services.
SimpleSwap reminds you that this article is provided for informational purposes only and does not provide investment advice. All purchases and cryptocurrency investments are your own responsibility.

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