The year of 2024 has seemingly ushered in an exciting time for the Bitcoin ecosystem. Right from Bitcoin ETFs getting approved for trading in the US this January, to its most recent halving event – a lot has been going on in the Bitcoin habitat. In another latest development, a new name has entered the Bitcoin family. Called the Bitcoin Runes, this is an innovative protocol created to address issues associated to Bitcoin-based token systems that depend on off-chain data and native tokens used for operations.
Bitcoin Runes made its debut in the crypto sector on April 20 – sharing its launch date with Bitcoin’s fourth halving event. Runes has been created by Casey Rodarmor, who also created the now popular Ordinals protocol for BTC-based NFTs.
The purpose of Bitcoin Runes is to reportedly enhance the management of Unspent Transaction Output or the UTXO on the Bitcoin blockchain. The UTXO is a fraction of Bitcoin value linked to a specific address on the blockchain representing the funds that are yet to be spent.
The protocol is capable of directly using Bitcoin’s native functionalities to reduce blockchain fluff and make user experience better. In doing so, Runes will make sure that every unit of Bitcoin that is part of a transaction – is properly accounted for. With this, any chance of currency duplication is eliminated, hence making all transactions ripe with transparency and integrity at the time of minting. Rodarmor has been keeping followers on X updated with the benefits tied to Runes.
One advantage of runes vs BRC-20 is that if you have a UTXO which has some quantity of runes, you can create multiple PSBTs offering to sell different quantities of those runes from the UTXO, with runestones that transfer different amounts to the buyer and return the remainder…
— Casey (@rodarmor) April 21, 2024
The introduction of Runes is expected to expand the types of tokens that the Bitcoin blockchain could support, and could lead to a spike in Bitcoin’s overall utility quotient. In addition, the Runes protocol will simplify the process of creating NFTs based on the Bitcoin blockchain.
Runes launch has reportedly also contributed to a fluctuation in transaction fees.
With medium-priority transactions now costing $8.48 (roughly Rs. 705) while high-priority transactions costing $9.32 (roughly Rs. 775), the transaction fees on Bitcoin blockchain have reportedly recorded a significant drop from previous metrics. Before the halving and launch of Runes, the BTC transaction prices were at $146 ((roughly Rs. 12,167) for medium-priority transactions and $170 (roughly Rs. 14,167) for high-priority transactions.
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