TL; DR
Full story
ICYMI, the Rune Protocol, is a new project from the creator of Bitcoin Ordinals (we wrote about how it works here) that was launched at the same time as the BTC halving.
Like Ordinals, it lets people ‘etch’ (i.e. mint) tokens into the chain.
The two main differences are:
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Ordinals are ‘non-fungible’ (unique), while Runes allow you to create fungible tokens on the Bitcoin network.
This opens up all kinds of possibilities, such as stablecoins built on top of BTC, or new types of governance tokens.
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The Rune Protocol reduces the number of ‘Unspent Transaction Outputs’ (UTXOs – more on that here).
In theory, this means less congestion on the Bitcoin network should result in cheaper transaction costs.
There was a lot of excitement about Runes before the halving, so it’s no surprise that within the first few days there was already one a few hundred Runes projects.
The great thing about Runes so far (and Ordinals that preceded it) is that it has led to an increase in the number of developers eager to contribute to the Bitcoin project again.
Unfortunately, Runes minters have already paid just a few blocks after the halving over $5 million USD in transaction costs.
As the dust settles and the first mover advantage fades over time, it will be interesting to see if Runes is the next story that will push BTC back to its all-time highs.
Can it live up to the hype?
Time will tell.