TL;DR
- Bitcoin Runes Launch: A new protocol called Bitcoin Runes, introduced by Casey Rodarmor, has surpassed Bitcoin (BTC), Ordinals, and BRC-20 in daily transactions. Launched on April 20, 2024, it’s considered the most significant update since Ordinals.
- Transaction Dominance and Recovery: Runes quickly dominated Bitcoin network transactions, peaking at 81.3% on April 23. Despite a subsequent decline, it began recovering in May, reclaiming over 60% of transaction shares and accruing 2,253 BTC in fees for miners within 16 days.
- Innovative Features and Impact: The protocol introduces improvements like extendability, a larger namespace for tokens, and security enhancements. Its UTXO approach aligns with Bitcoin’s design principles.
Bitcoin Runes, the groundbreaking update to the Bitcoin blockchain, has overtaken the original Bitcoin (BTC), Ordinals, and BRC-20 in terms of daily transactions. This new protocol, unveiled by Bitcoin Ordinals founder Casey Rodarmor, introduces a novel fungible token protocol on Bitcoin.
Runes, which launched on April 20, 2024, coinciding with the fourth Bitcoin halving, has been hailed as the biggest update since Ordinals. This approach employs an indexer-based model that extends the social consensus mechanisms initially introduced by the Ordinals initiative.
This new protocol streamlines the processes of etching, minting, and transferring Bitcoin-native digital commodities. Runes streamline operations into a single transaction, unlike the BRC-20 token standard, which requires multiple transactions for deployment, minting, and claiming.
It also introduces several key features and improvements, including extendability and future-proofing, a larger namespace for tokens, security enhancements, and unique token naming.
According to data from Dune Analytics, a majority of the transactions on the Bitcoin network were related to Runes until April 24. On April 23, Runes claimed the highest share of transactions at 81.3%. However, over the next nine days, the number of Runes transactions consistently decreased until May 2. However, there was a gradual recovery in Runes transactions.
The Recovery Phase of Runes and Its Implications
Starting on May 3, Runes started a recovery phase. In the subsequent days, specifically on May 4 and 5, Runes managed to reclaim its transaction share, exceeding 60%. The rapid increase in the number of transactions inadvertently increases the network fees, often working in the favor of Bitcoin miners. The Runes protocol accumulated 2,253 BTC in fees for the mining community within 16 days.
Runes’ unique issuance model and efficient on-chain footprint — its UTXO (unspent transaction output) approach — differs from standards like BRC-20. This approach not only adheres closely to Bitcoin’s inherent design principles but also facilitates more efficient and adaptable handling of token balances and transfers.
The increase in fees has been greeted positively by the mining community, as their income saw a substantial decrease after the Bitcoin halving. In May, the daily total earnings for Bitcoin miners fell below $30 million.
To sustain their profitability, miners have taken steps to enhance their existing technology infrastructure. They have incorporated highly efficient mining equipment into their operations to lower overhead costs and boost both performance and profitability.
The launch of Runes has significantly altered the landscape of how digital assets are created and exchanged on the Bitcoin network. With its innovative approach to token issuance and transfer, Runes is set to dominate daily transactions on the Bitcoin network.
