Ethereum may have led by example in terms of network innovation through decentralized finance (DeFi) apps and smart contracts, among other blockchain-based applications. Still, it’s Bitcoin that has accustomed industries to new, groundbreaking solutions in development and innovation for a spell. And yes, the Runes is exactly what waits on the horizon for Bitcoin and the blockchain world, marking a “renaissance” in activity through a widespread fungible token standard, like the widely-discussed BRC-20.
Non-fungible tokens, or expertly said, ordinals, have been the front and back of the crypto space as of late, driving novelty and modernization together with Bitcoin layer 2s and other DeFi primitives. What we’re witnessing now is heightened activity within the BTC NFT space on the back of the rising demand and spiking trading volumes in ordinals.
Market share data indicates continuously growing Bitcoin dominance over its competitor, Ethereum, in terms of NFT trading volumes as ordinal collections begin throning over the market. Now that ordinals are at the dawn of a new era, what can we expect months from now, and what insights can pundits like asset manager Franklin Templeton give us?
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What exactly are Runes on Bitcoin? What is the purpose of the protocol?
Casey Rodarmor, one of the most influential and knowledgeable personalities in the crypto space, in part for founding Bitcoin’s Ordinals, launched the Runes documentation on March 27th of this year. The protocol is an addition to the system as it’s known, bringing a new approach to fungible tokens compared to previous models like Taproot Assets or BRC-20. So, where’s the big difference, you may ask.
Unlike past token standards, the Bitcoin network boasts a UTXO-shaped system that increases the focus on the network’s user-friendliness. Notably, UTXO is short for the Unspent Transaction Output-based model. Like traditional currencies’ virtual representations, Runes eases the development and monitorization of tokens and tracks exchanges and ownership in a decentralized manner.
Thus, Runes can hold numerous tokens in a single UTXO, possibly streamlining procedures when compared to other protocols that usually rely on off-chain techniques.
What is the purpose of the protocol?
It’s only natural to wonder what fueled the need and ambition to create a new protocol for Bitcoin when there were already others like Omni Layer, Counterparty, RGB, Taproot, and BRC-20 existing. This is why we’re simplifying everything so you can get the needed insights in a second.
Lower difficulty, checked
Some users and developers considered the previous alternatives to be uselessly challenging, UTXO-avoidant, and dependent on off-chain data. The core of the design is intended to boost the audience attracted to Bitcoin, hopefully enhancing adoption rates as well. Yet, the ordinals’ creator, Rodarmor, born the challenges and pitfalls of fresh protocols to the community in mind, tackling issues like the lack of unified standards.
The Bitcoin-exclusively Runes protocol showcases a dramatic shift from Stamps, ORC-20, BRC-20 and other conventional BTC token protocols, all being made possible through the employment of the UTXO solution. Bitcoin-blockchain interchangeable tokens could be more easily created and managed, slashing the chain’s obscurity and footprint. Runes thus seeks to provide a more efficient and unified system compared to previous protocols that function within the whole network.
Ordinals, meritedly touted as Bitcoin’s “renaissance”
According to numerous crypto and finance experts such as Franklin Templeton, who now makes all the headlines, digital assets are at the dawn of a beneficial momentum in the innovation sector. Bitcoin NFTs, also known as Ordinals, and new fungible tokens standards like the already-frenzied Runes catalyze renewed waves of interest and activity in the Bitcoin network.
Many recent studies are mainly inspired by the heightening trading volume and market capitalization increases thanks to Ordinals, as the financial titan states. Furthermore, Runestone, a rioting collection within the NFT market alongside Bitmap, Ordinal Maxi Biz, Bitcoin Puppets, and NodeMonks, is monitored at close range by the digital asset team. The project has worked through the ranks to become the third most extensive NFT collection by market cap across Ethereum, Solana, Polygon, and all the other blockchains.
The craze installed within the crypto space prompted other developers to find ways to profit from the hype. A great example in this regard is Dogecoin’s own representation of the Bitcoin Ordinals project, Runestone, and the token airdrops to qualified accounts. A collection of over 30K Dogecoin NFTs started to trade, with a floor price of 170 DOGE. Possibly, Bitcoin has inspired many astute developers worldwide to come up with innovative variants.
Bitcoin has turned the tables in its favor
Ordinals, a way of inscribing data like names, pics, videos, music, and more onto the Bitcoin blockchain, have taken the world by storm, catalyzing massive activity in network-based non-fungible token activity. The assets’ performance accounted for a 50% market share five months ago, and the ascending trend has followed suit ever since.
Interestingly, Bitcoin-powered NFTs have exceeded their Ethereum-based rivals regarding expansion more than a few times since November 2023. Now, it seems like some pundits’ optimism about the Ordinals’ performance was not in vain. In a past report, Franklin Templeton suggested a whole resurgence of the NFT market in the 2023 finals, which was bound to happen mainly due to the upcoming Bitcoin rally and the rising Ordinal activity.
Bitcoin does stand plenty of potential to innovate and revolutionize the crypto and NFT world. Still, the journey may have just begun, so keeping tabs on what’s being cooked in the oven will be an exciting adventure.
Summing it up
Ordinals protocol’s creator, Casey Rodarmor, has just blessed the network and the larger developer community with a new approach through the UTXO-friendly Runes released in March of 2024. The latest model differentiates itself from models like Stamps, ORC-20, BRC-20, and more.
Numerous objectives are to be met, but most importantly, the protocol aims to improve and ease how developers generate and handle fungible tokens on the BTC blockchain. Unlike popular protocols like BRC-20, which are known for overburdening the network, the latest prototype provides a sleeker system that ups the Bitcoin network.
The path to success is inevitably sprinkled with challenges, like achieving the whole community’s approval and triumphing over old stagers like BRC-20. However,
