The BRC-20 token standard has gained significant popularity in the cryptocurrency market since its launch earlier this year. However, its success has not been without criticism. Now, the inventor of Bitcoin Ordinals is proposing a new Bitcoin-based fungible token protocol, called Runes, as a potential alternative to BRC-20.
The issue with BRC-20 tokens, according to the inventor of Bitcoin Ordinals, Rodarmor, is that they spam the Bitcoin network with “junk” Unspent Transaction Outputs (UTXOs). UTXOs represent the amount of cryptocurrency left in a wallet following a completed transaction. The proliferation of these UTXOs has become a problem with BRC-20 tokens, and Runes aims to provide a solution.
Runes is a UTXO-based alternative to BRC-20 that aims to minimize the creation of “junk” UTXOs. By using UTXOs, which fit more naturally into the Bitcoin ecosystem, Runes seeks to promote UTXO set minimization and responsible UTXO management. If successful, Runes could serve as harm reduction compared to existing protocols like BRC-20.
The potential benefits of a good fungible token protocol for Bitcoin are substantial. It could bring significant transaction fee revenue, attract developer mindshare, and draw more users to the Bitcoin network. Despite the current dominance of scams and memes in the world of fungible tokens, Rodarmor believes that the right protocol can add value to the cryptocurrency market.
In a recent Twitter Spaces conversation with Trevor Owens, co-host of The Ordinals Show, Rodarmor discussed his idea for Runes. Shortly after the conversation, Owens announced a $100,000 investment offer from the Bitcoin Frontier Fund to developers who can create a working Rune application. This offer serves as an incentive to further explore and develop the potential of Runes.
While Rodarmor’s proposal is gaining attention, it is important to note that it is still in the early stages. The concept of Runes is yet to be fully realized, and further development is required to determine its feasibility and compatibility within the Bitcoin ecosystem.
As the cryptocurrency market continues to evolve, alternative solutions and protocols like Runes may play a crucial role in enhancing efficiency, minimizing spam, and fostering responsible blockchain management. It will be interesting to see how Runes progresses and if it can offer a viable alternative to the BRC-20 token standard in the future.