Bitcoin Ordinals Creator Proposes New Fungible Token Protocol: Runes
Summary:
The creator of Bitcoin Ordinals has introduced a new fungible token protocol named Runes based on Bitcoin, potentially an alternative to the BRC-20 standard. Despite concerns of scams and memes filling the majority of fungible tokens, he believes the right protocol can bring substantial value to the Bitcoin network. The Bitcoin Frontier Fund may offer a $100,000 reward to encourage the development of a working Rune application.
The creator of Bitcoin Ordinals has put forth a novel fungible token protocol based on Bitcoin, which might serve as a feasible alternative to the BRC-20 token standard. The BRC-20 standard, introduced anonymously by a programmer named "Domo" in March, reached a market capitalization of $1 billion within just two months after its inception, with PEPE and ORDI being the most recognised BRC-20 tokens constructed on Bitcoin.
The BRC-20 protocol facilitates the production and exchange of fungible tokens via the Ordinals protocol on Bitcoin. However, according to Rodarmor, the problem with BRC-20 tokens lies in their ability to clutter Bitcoin with “garbage” Unspent Transaction Outputs (UTXOs). He explained in a September 25 post that BRC-20 tokens result in the “undesired effect of UTXO expansion,” and proposed Runes, a UTXO-based alternative, stating that UTXO-based protocols naturally align with Bitcoin by preventing the generation of "junk" UTXOs.
The Runes protocol, if it responsibly manages UTXOs while also having a minor in-chain impression, could potentially act as a harm-reducing counterpoint to prevailing protocols. The UTXO figure indicates the remaining cryptocurrency in a wallet after a transaction has been finalized. This remaining balance is used for future transactions and is registered in the UTXO database. Bitcoin's UTXO model assists in creating a transparent and verifiable ledger by stopping double-spending.
While acknowledging that 99.9% of fungible tokens are usually riddled with scams or memes, Rodarmor maintains that the correct fungible token protocol can enhance the Bitcoin network's value, arguing that creating an effective fungible token protocol for Bitcoin could bring in substantial transaction fee revenue, developer traction, and users.
During a September 25 Twitter Spaces call co-hosted by The Ordinals Show's Trevor Owens, Rodarmor revealed the concept of Runes, stating that he was still uncertain if he would continue to pursue it. Owens implied after the call that a $100,000 incentive from the Bitcoin Frontier Fund might be offered to the first team capable of creating a functioning Rune application, possibly advancing Rodarmor's suggestion further.
Published At
9/26/2023 5:07:41 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.