Casey Rodarmor, the creator of Ordinals which allowed for the creation of NFTs on the Bitcoin network, has surprised the crypto community by introducing a new protocol for fungible tokens called Runes. Despite expressing doubts about the idea, Rodarmor believes that this protocol could have a significant positive impact on Bitcoin, bringing in substantial transaction fee revenue as well as more developers and users to the network.
In a blog post, Rodarmor highlighted his uncertainty about creating a new protocol for fungible tokens on Bitcoin, noting that many fungible tokens in the market are being used in questionable schemes and memes. However, he recognizes that these tokens have gained popularity and that creating a robust protocol could be beneficial.
In this regard, he explains that Runes is a protocol that represents balances through Unspent Transaction Outputs (UTXOs), which can contain any amount of Runes. Transactions encode the transfer and issuance of Runes through an OP_RETURN output, specifying which Runes should be assigned to which outputs. Rodarmor’s goal is to maintain simplicity, avoid reliance on off-chain data, have no native token, and utilize Bitcoin’s UTXO model.
Rodarmor argues that this solution may attract more developers and users to Bitcoin. However, he acknowledges that the fungible token space is a challenging field and expresses uncertainty about the final outcome. This announcement comes as another data embedding scheme on Bitcoin, called Atomicals, is also gaining traction. Similar to BRC-20 tokens, Atomicals can create ARC20 tokens. For now, Rodarmor’s Runes are just a proposal, and only time will tell if they will gain popularity or face challenges in the competitive fungible token market.
In a year in which the cryptocurrency market has undergone various transformations and challenges, the introduction of new protocols and technologies may serve as a way to boost the development and adoption of Bitcoin.