In the last few months, the Bitcoin community has shown a great deal of interest in Runes.
Casey Rodarmor designed Runes as a fungible token standard. He is also the author of Ordinals. This protocol was designed as an alternative to BRC-20 – an experiment token standard on Bitcoin for fungible tokens.
Bob Bodily is the founder of Bioniq. He told Blockworks: “The BRC-20 is built around ordinals. It stores data in a Bitcoin’s transaction witness data. In a similar manner, runes information is also stored in a storage function named OP_RETURN.”
“Runes is a very elegant byte-efficient protocol; everything is encoded down into integers that you can store in the operator,” Bodily said.
BRC-20 tokens often have a tendency to leave behind traces. “junk” After transactions that can clog up the network, Runes will use Unspent Transaction Outputs. Messages sent with the rune protocol called runestones are stored in Bitcoin transaction outputs.
Runes is a token that allows you to deploy, mint, and launch ERC-20-compliant tokens.
Rennick Palley believes Runes will have a great future in allowing bitcoin miners remain profitable.
“By adding a whole new layer of fungible tokens on Bitcoin, Runes is making the network busier and more versatile. This should mean more transactions and, by extension, more fees for miners. It’s especially promising because it meshes well with Bitcoin’s existing UTXO model, which is a core part of how miners operate,” Palley stated.
He does note that transaction costs may increase due to the growing popularity of Runes, which could make Bitcoin everyday transactions less attractive.
“It should encourage more BTC to transact off the layer,” Palley commented. “Overall, I see the rise of layer-2 solutions as a major positive. These technologies will be the key to enabling hyperbitcoinization. Bitcoin would always need layer-2 solutions to scale — ordinals, BRC20s and Runes have just accelerated the timeframe, which is great.”
Alexei Zamyatin shares the same sentiment. He is co-founder and CEO of BOB, which uses a hybrid layer-2 that uses Bitcoin and Ethereum. He says that even though bitcoin miners will likely remain profitable due to the Runes Protocol, fees are still a major concern.
“Ultimately, trading and other DeFi related activity will have to move to Bitcoin layer-2s/sidechains if [they] are to compete with the UX people are used to from Ethereum and Solana. Otherwise, the 10 min[ute] block times and high fees will result in a decrease of activity very quickly once first speculation is done,” Zamyatin was quoted as saying:
Zamyatin noted the increasing interest in Bitcoin Layer-2s is not solely due to Runes, but it remains positive for the Bitcoin eco-system. Additionally, Zamyatin notes that many current projects are riding the “hype wave,” Though these projects are likely to disappear in the future.
“There are a number of strong technical and product teams that may be able to create a strong competition for ETH layer-2s. A lot of this still depends on technical innovation in the form of BitVM or a fork to Bitcoin, which I personally do not believe will happen soon, unfortunately,” “He said”
Zamyatin, however, remains positive, noting the layer-2s, and Bitcoin sidechains, will probably bring greater value to Bitcoin’s blockchain.
“The Bitcoin learning curve is steep and we need to give people a simple way to start playing around with Bitcoin assets — instead of, as previously, tell[ing] them that anything else but Bitcoin is a scam,” “He said” “This is certainly something that has changed since Ordinals: Bitcoin has become more welcoming of new developers and builders, with the toxic maximalist culture subsiding into irrelevance.”
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