Casey Rodarmor believes that Runes, a fungible token protocol, would not overload the Bitcoin network with unnecessary data, unlike BRC-20 tokens.
The person who made Bitcoin Ordinals now suggests a new money plan with Bitcoin-based fungible tokens. This novel approach offers an intriguing alternative to the established BRC-20 token standard.
The anonymous developer, “Domo,” launched the BRC-20 standard in March. Within two months, the market cap of BRC-20 tokens skyrocketed to $1 billion. Notably, PEPE and ORDI emerged as prominent examples of BRC-20 tokens built on the Bitcoin platform.
New terrible idea just dropped: Runes.
A worse-is-better fungible token protocol for Bitcoin.https://t.co/TPVrUvWxm8
— Casey (@rodarmor) September 25, 2023
The BRC-20 protocol facilitates the creation and transfer of interchangeable tokens on the Bitcoin network through the Ordinals protocol. BRC-20 tokens risk flooding Bitcoin with excess UTXOs, a concern raised by Rodarmor.
BRC-20 tokens present an “undesirable consequence of UTXO proliferation,” as explained in a blog post on September 25. The author suggests Runes as a UTXO-based alternative.
UTXO-based protocols align with BTC, minimizing unnecessary UTXOs by avoiding their creation and harmonizing with Bitcoin’s structure.
TLDR on Runes – A potential fungible token protocol for Bitcoin
– Casey remains skeptical, citing "99.9% are scams and memes," but recognises they don't appear to be going away.
– Employs a UTXO-based system, notably simpler than BRC-20.
– Uses the letter 'R' in the… https://t.co/zYP43f70gh
— Franken (@ItsFranken) September 25, 2023
Rodarmor expressed that a smaller on-chain presence and responsible UTXO management in this protocol might reduce harm. This could make it more beneficial compared to existing protocols.
Bitcoin’s UTXO Model & Fungible Tokens
UTXOs represent the remaining cryptocurrency in a wallet after a transaction is complete. This balance is utilized in future transactions and securely stored within the UTXO database.
The UTXO model employed by Bitcoin ensures that the cryptocurrency operates on a transparent and auditable ledger. This model effectively tackles the issue of double-sp.
Rodarmor mentions some challenges associated with fungible token protocols on Bitcoin. Examples of these protocols include Good for Bitcoin, Counterparty, and Omni Layer.
Rodarmor acknowledges that a majority of fungible tokens consist of scams and memes. However, he holds the belief that a well-designed fungible token protocol has the potential to enhance the value of the Bitcoin network.
A strong, fungible token technology for Bitcoin might significantly increase its user base, developer interest, and transaction fee income.
During a Twitter Spaces conversation held on September 25th, co-host Trevor Owens of The Ordinals Show and Rodarmor discussed an innovative idea called “Runes.” Rodarmor revealed that he had developed the concept last week and expressed his curiosity about pursuing it further.
Open $100k investment offer in upcoming @BTCFrontierFund accelerator for first team who can get a working (not terrible) Rune indexer, issuance and/or transfer app, up live and running
Don't make the tickers required to be unique, will be a shit show
DM me. Serious offer. pic.twitter.com/6W0IwlhB9x
— trevor.btc (@TO) September 26, 2023
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Shortly after the call, Owens made an offer. He floated the idea of providing $100,000 from the Bitcoin Frontier Fund to prospective developers. Their task would be to get a Rune application up and running, aligning with Rodarmor’s proposal.