Casey Rodarmor, the creator of the Bitcoin Ordinals protocol, has proposed a new protocol for fungible tokens on the Bitcoin network. The highly anticipated protocol would not leave more “Junk” on the Bitcoin network as compared to digital collectibles like the popular BRC-20.
In a September 25 blog post, Bitcoin Ordinal creator shared plans to launch a new protocol called “Runes” dedicated to fungible tokens. Rodarmor detailed that the much-anticipated protocol is much better than that of BRC-20. The protocol is light and leaves no residue on Bitcoin’s network.
🚨 ALPHA LEAK 🚨
The creator of Ordinals, Casey Rodarmor, dropped a proposal for a BRC-20 alternative called Runes just 27 mins ago.
I’m gonna go live on a spaces in a few mins to discuss this.
Still trying to understand exactly how this should work, but considering Casey has…
— trevor.btc (@TO) September 25, 2023
Fungible Tokens Vs Non-Fungible Tokens
Non-fungible tokens are digital assets that have been tokenized via a blockchain network. These digital assets are assigned unique identification codes and metadata that distinguish them from other crypto tokens. Digital collectibles can be traded and exchanged for money, crypto, or other NFTs, depending on the value the market and owners have placed on them.
NFTs are a type of deed or title of ownership of a unique, non-replicable item. For example, a flight ticket is non-fungible because there cannot be another of the same kind due to its specific data. A house, a boat, or a car is non-fungible physical assets because they are one-of-a-kind.
On the other hand, Fungible tokens or assets are divisible and non-unique. For instance, fiat currencies like the dollar are fungible: A $1 bill in New York City has the same value as a $1 bill in Miami. A fungible token can also be a cryptocurrency like Bitcoin: 1 BTC is worth 1 BTC, no matter where it is issued.
Earlier this year, Casey Rodarmor rolled out a new protocol for non-fungible tokens. The Bitcoin developer inscribed NFTs using Ordinal theory, a protocol created by anonymous Bitcoin creator Satoshi Nakamoto. Bitcoin Ordinals may represent the value of text or audio.
In March 2023, inspired by Bitcoin ordinals and Ethereum’s ERC-20, an on-chain analyst and crypto developer who goes by the name “Domo” introduced the BRC-20 standard tokens to enable the issuance and transfer of unique and interchangeable tokens on the Bitcoin blockchain.
Updated the gitbook to address common questions and my intentions for the experiment going forward.https://t.co/h6fksQ1oAe
— domo (@domodata) March 10, 2023
The BRC-20 standard tokens received a warm reception among crypto investors. Between April and May, the number of BRC-20 transactions accounted for over 50% of all Bitcoin blockchain transactions, outpacing regular BTC transactions. Unfortunately, BRC-20 NFTs have since faded from their initial market hype amid the recent crypto market downturn.
Fungible Token Protocol ‘Runes’
The inventor of Bitcoin Ordinal is back in the crypto market with another sensation Bitcoin-based fungible token protocol that is a potential alternative to the BRC-20 token standard. The new protocol operates relatively similarly to BRC-20, which enables the minting and transfer of fungible tokens on the Bitcoin Ordinal protocol.
In a blog post, Casey Rodarmor explained that the main difference between the BRC-20 and his new protocol is that BRC-20 features undesirable consequences of “unspent transaction outputs” or UTXO proliferation. The Bitcoin developer explained:
“Crypto protocols that are UTXO-based fit more naturally into Bitcoin and promote UTXO set minimization by avoiding the creation of ‘junk’ UTXOs. If this protocol had a small on-chain footprint and encouraged responsible UTXO management, it might serve as harm reduction compared to existing protocols.”
Before summarizing, Casey Rodarmor admitted that 99.9% of fungible tokens are filled with scams and memes. However, he believes the right fungible token protocol can add value to the Bitcoin network. The development of a new standard token and trading of Runes-based tokens is expected in the coming weeks or months.
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