What Are Bitcoin Runes? Runes Protocol on Bitcoin Explained
The post What Are Bitcoin Runes? Runes Protocol on Bitcoin Explained appeared on BitcoinEthereumNews.com.
Bitcoin Runes is a protocol that allows users to create and transfer fungible tokens on the Bitcoin blockchain. Blockchains such as Ethereum and Solana make it fairly easy to create fungible tokens thanks to their extensive smart contracts capabilities. Some examples of such tokens are Uniswap’s UNI token (on Ethereum) or Jupiter’s JUP token (on Solana). While Bitcoin does have some scripting capabilities, it is much more limited than dedicated smart contract blockchains like Ethereum. Thankfully, there are a lot of talented developers in the Bitcoin ecosystem that are capable of squeezing as much functionality as possible from Bitcoin’s limited scripting functionality and introduce features that were previously thought not feasible on Bitcoin. The Bitcoin Runes protocol is an example of such ingenuity. The protocol was developed by Casey Rodarmor and launched on April 20, 2024, coinciding with the fourth Bitcoin halving. What are Runes on Bitcoin? Bitcoin Runes explained To be clear, Bitcoin Runes are not the first protocol to enable the creation of fungible tokens on Bitcoin – the BRC-20 token or ARC-20 token standards provide this functionality and were released earlier. However, Bitcoin Runes creator Casey Rodarmor sought to make a more efficient way of creating fungible tokens on the Bitcoin blockchain. The Runes protocol minimizes the load on the Bitcoin blockchain by reducing the amount of data needed for transactions. Compared to the BRC-20 and ARC-20 standards, the Bitcoin Runes protocol uses a fundamentally different design, which relies on Bitcoin’s UTXO architecture and the OP_RETURN opcode. UTXO (Unspent Transaction Outputs) are units of BTC that are tied to specific Bitcoin addresses. They represent unspent BTC that can serve as inputs in new transactions. In the Bitcoin Runes protocol, each UTXO can contain varying amounts or types of Runes, which streamlines the management of tokens. Meanwhile, the…
Filed under: News - @ June 28, 2024 2:24 pm