Bitcoin Runes Protocol Experiences Initial Surge But Struggles to Maintain Transaction Volume
Summary:
The Bitcoin Runes protocol, launched on April 20 and central to the Bitcoin DeFi movement, initially dominated Bitcoin blockchain traffic but has struggled to sustain high volumes of transactions. Despite peaking at 81.3% of all Bitcoin transactions, Runes' share declined to 11.1% by May 2, and only represented 12.7% as of May 22. Despite this decrease, experts posit that the real value of the Runes protocol may emerge months after the initial investor hype fades, pointing out the continuing value and utility of the secure and robust Bitcoin network.
Bitcoin Runes, a protocol introduced on April 20, has been grappling with managing the swelling number of Bitcoin operations. On eight separate days, predominantly weekends, transactions via Runes have overshadowed other activity on the Bitcoin blockchain. This introduction just happened to align with Bitcoin's fourth halving event, a convergence that ignited an explosive increase in transaction traffic on the Bitcoin (BTC) blockchain. The total income from Bitcoin mining crossed the threshold of $100 million for the first time, hitting a record daily earnings high of $107.7 million. The inaugural halving block saw expenses of $2.4 million in fees for the engraving of runes and rare satoshis.
Between April 20 and April 24, over half of all Bitcoin transactions were Runes-related. The highlight of this activity was April 23, where these transactions used up 81.3% of the total capacity. However, this number had dwindled to a mere 11.1% by May 2.
Despite the dip, interest in Runes revived during the weekend of May 4 but did not maintain this momentum in the subsequent weeks. As of May 22, Runes transactions represented just 12.7% of all Bitcoin transactions, dwarfing the figures for Bitcoin Ordinals (0.7%) and BRC-20 (1.5%) protocols. Since the record peak, Runes transactions have fallen by over 84%.
Bitcoin Runes is part of a broader developer trend known as Bitcoin Decentralized Finance (DeFi), which strives to expand the functionality of the Bitcoin network. Coupling this new protocol with Ordinals and BRC-20, the Bitcoin network registered a record of 926,000 transactions in a single day.
However, it's worth noting that the real market opportunity of the Runes protocol might only become apparent a few months after the initial burst of investment enthusiasm dies down. TeraWulf's CEO and co-founder, Nazar Khan, suggested to Cointelegraph that the Bitcoin network, being the most decentralised, secure, and robust platform that exists, will see further use cases and value driven by its block space, as showcased by the Runes and Ordinals.
Published At
5/23/2024 10:55:56 AM
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