1 Who created RUNE?
The popularity of the RUNE protocol is related to its developer, Casey Rodarmor. Rodarmor is an experienced programmer who has worked on Bitcoin since 2010.has collaborated with the Bitcoin Core team and is also the creator of the popular Bitcoin NFT protocol, Ordinals.
Casey Rodarmor has been dubbed “the artist” in Bitcoin, for his affinity with digital art. Source: Github. Introduced to the Bitcoin code in late 2022, Ordinals is one of the features recently added to Bitcoin that has gained the most success and attention among the public. Similar to the case of RUNE, Ordinals is responsible for standardizing the process of creating and transferring non-fungible tokens in Bitcoin. That is to say, It is the element that makes it possible to register digital art, unusual objects and other types of digital artifacts on this network. With the appearance of RUNE, whose proposal became official in September 2023, Rodarmor point that this new standard simplifies the programming of assets such as memecoins or for «degens» traders, the name by which any trader who usually invests in highly volatile cryptocurrencies is known. In this sense, although he considers that its use will be unserious and mostly focused on cryptocurrency jokes, he considers that it is developed so as not to hinder Bitcoin and work optimally.
Runes were built for degens and memecoins, but the protocol is simple, efficient, and secure. It is a legitimate competitor to Taproot Assets and RGB.The protocol is self contained and has no dependencies on ordinals or inscriptions, making it extremely simple.Balances are…— Casey (@rodarmor) April 1, 2024
2 How does the RUNE protocol work?
But what does Casey Rodarmor mean when he points out that RUNE is a «serious» protocol? Well, in general terms, these are the elements that make its operation possible. Unlike other token standards, such as Bitcoin's BCR-20 or Ordinals itself, RUNE token programmers do not have to enroll their assets in a satoshi unit or transfer. RUNE Take advantage of the UTXO element to register all the data of a token that will be created or transferred.
What is a UTXO?
Any amount of bitcoins, or satoshis, that have not been spent in an address is known as UTXO. To understand the concept you have to think about the balance of an address and its transactions: every time a person spends with their bitcoins, there may be a change or remaining balance that has not been spent but belonged to the previous total balance. By recognizing that this balance has not been spent, new transactions can be generated with the remaining money without losing the trace/history of the origin of said bitcoins. UTXOs, in general terms, allow accounting to be maintained that is transparent, orderly and protected from cases of double spending. The way RUNE works with UTXOs is very simple. The first thing to understand is that each of these tokens is recorded in the unspent bitcoin balances. That is, in the UTXOs of a transaction. By this, we mean that the tokens do not belong to a specific address, nor are they anchored to a transaction or a specific satoshi, but rather they are part of the information that all Bitcoin transactions have naturally and that are recorded without need. to make your transfer heavier.
Every time a new transaction is made, wallets create a new UTXO that records the remaining balance amount or the new amount that is entering the address. Source: River Capital. Whoever has the UTXO in their domain—that is, the private key that allows that balance to be managed and transferred—will have the RUNE token in their possession. Likewise, to transfer the token to another owner, you do not have to send a specific number of satoshis or transfer an address, but rather the sending of a certain number of created tokens is programmed in the UTXO. In this way, Casey Rodarmor states that it avoids creating garbage/spam UTXOs and plaguing the Bitcoin network with data that makes it increasingly heavy to process. The other advantage of RUNE is that all the token information is recorded in the UTXO itself. The protocol indicates that, to create a token, data such as: the identification, the output and the number of tokens to create. This data is added thanks to the Bitcoin OP_RETURN function, which allows information to be stored in a UTXO without the need to congest the network. Through identification, you can know if the token has been one of the first created or one of the most recent. For example, the first RUNE token to appear on the network was one created by Rodarmor, called Uncommon Goods, which will be creating new supply for up to 4 years. The output, on the other hand, is the index that allows other users to receive the token or mint/create new ones. Lastly, and possibly the most obvious, the quantity indicates how many tokens can be created from that UTXO and how many have been created so far.
Uncommond.Goods is a RUNE token that will be generating new units up to Bitcoin block 1,050,000. Source: Ordiscan. Due to this series of characteristics, the RUNE standard is compatible with projects such as Bitcoin's Lightning Network. The protocol is not dependent on Casey's previous projects, as is the case with Ordinals, and the library to encode the tokens is available on the official Ordinals website. A series of technical decisions that seek to facilitate the adoption of the standard among Ordinals and BCR-20 developers who already own multiple memecoins, such as ORDI, SATS, PUPS and Bitcoin Wizards.
3 How was the RUNE protocol activated?
RUNE became an active protocol in the Bitcoin code on April 19, 2024, exactly the same time the fourth Bitcoin halving was activated. The new standard came into effect in block 840,000being for that same block that almost 700 RUNE tokens were created.
Some RUNES with funny names stood out, like the skateboard cat and the hammer rune. Source: Mempool.space The launch of the RUNE protocol revolutionized the Bitcoin network. As soon as the option was active, many users began to create their own tokens or dedicated themselves to issuing units of those runes that could be claimed. The furor generated an abrupt rise in network commissions, since Up to 78.6 BTC in commission (about 500 million dollars) was paid for a RUNE token. In the Ordiscan and Runes Bitcoin explorers it can be seen that a significant number of these tokens have already created all their units, so they will be dedicated to marketing them on the platforms and exchanges that allow their purchase/sale. Another feature of interest is that the vast majority of the RUNE tokens created are memecoin-themed, standing out with names such as the cat on a skateboard, Satoshi Nakamoto, Runa Martillo, Pizza Entrega, Hold Diamond Dick, among others.
4 How can you create, buy and sell RUNE?
Currently, there are several platforms that offer services to create your own RUNE tokens. For example, the Unisat marketplace has the option of registering a token and its basic data in a UTXO on the network. For example, in case the user wants to create his own token of 0, You must enter the name of the token, its market symbol, the number of units to be created and the commission you will pay to register on the network.
The creation of runes is not cheap, since the commissions to register these tokens on the network are usually high. Source: Unisat. Likewise, this platform and the Ordiscan explorer allow new units of tokens to be minted or created in the event that the creator has not issued all the units. To carry out this activity, users must first explore which tokens are available for mining, their proposal and movement in the market. By locating a RUNE token of their liking, the user can access Unisat to obtain some units not yet issued in exchange for a commission on the network. Those interested in buying and selling RUNE tokens have other options, e.g. The OKX exchange is one of the first in the market to add support for the protocol. This platform, together with Unisat, has a specialized market where RUNE token owners offer their assets to the community. To participate in these spaces, it is necessary to have a cryptocurrency wallet that supports the RUNE protocol, bitcoins to pay the network commission and do in-depth research on the benefits and disadvantages of investing in memecoins.