What are Runes?
The Runes protocol activates on block 840,000.
From the guy that brought you Ordinals and Inscriptions, this latest creation is a standard for issuing fungible tokens on Bitcoin
Runes allow Bitcoin transactions to etch, mint, and transfer Bitcoin-native digital commodities. Whereas every inscription is unique, every unit of a rune is the same. They are interchangeable tokens, fit for a variety of purposes.
The Runes protocol proposes a small on-chain footprint and encourages responsible UTXO management, which might serve as a more efficient approach to something already in existence - BRC-20 tokens - which has the undesirable consequence of UTXO proliferation (high fees!).
“If Runes are successful, they’ll drain liquidity, technology, and attention away from other cryptocurrencies, and bring it back to Bitcoin,”
Bitcoin Maximalism?
Runes rival RGB / Taproot Assets
RGB and Taproot Assets rely on off-chain data - they store the metadata of its assets off-chain, making the asset information detached from Bitcoin’s main layer.
Rune balances are held by UTXOs, this is where Rune protocol messages, called runestones, are stored. A UTXO can contain any amount of any number of runes.
A runestone output's script pubkey begins with an OP_RETURN, followed by OP_13, followed by zero or more data pushes. These data pushes are concatenated and decoded into a sequence of 128-bit integers, and finally parsed into a runestone.
A transaction may have at most one runestone.
A runestone may etch a new rune, mint an existing rune, and transfer runes from a transaction's inputs to its outputs.
A transaction output may hold balances of any number of runes.
Runes are identified by IDs, which consist of the block in which a rune was etched and the index of the etching transaction within that block, represented in text as BLOCK:TX. For example, the ID of the rune minted the 20th transaction of the 500th block is 500:20.
If you are interested in the specification, check it out here.
Future development
Interested to hear a Bitcoiners perspective. Is it all noise? The protocol is lightning compatible and I've no idea whether or not it could be further enhanced by something like BitVM? Could it even incorporate something like Cashu or Fedimint?
If you want shitcoins to perish, you'd have thought the sound money education would have worked by now. The many hours of maxi orange pilling content isn't working, it's just enriching piggyback influencers. You have to take the fight to the market and ship stuff - strangler fig pattern.
@rodarmor is pretty upfront and honest about the whole thing being pure gambling and degen entertainment.
It's not a shitcoin. It's a venue for people to create shitcoins, which is possibly worse and more dangerous. We’ll see.
Regardless, I'm Bullish on Bitcoin.
Check out my previous post on the importance of bubbles.