Runes Drives Up Bitcoin Transaction Costs
Runes Drives Up Bitcoin Transaction Costs
Runes, a protocol akin to BRC-20, has garnered significant interest as transaction fees on the Bitcoin network surged ahead of the halving. Runes is set to launch in conjunction with the halving event.
Runes is a new protocol developed by Casey Rodarmor, the developer behind Ordinals. The primary idea behind Ordinals revolves around bringing NFTs to Bitcoin, distinguishing specific satoshis based on their printing sequence. This standard token is referred to as BRC-20, aiding in the facilitation of exchangeable token issuance.
Similar to BRC-20 in its aim to enable new tokens to be traded on the Bitcoin network, Runes differs from BRC-20 in that it will utilize the UTXO (unspent transaction output) model.
Essentially, Runes is expected to be a more efficient token issuance implementation.
Rodarmor announced Runes in September 2023. Given the success of BRC-20, it is unsurprising that many are betting on Runes to be the next big thing. In January 2024, OKX announced it would enable support for Runes on its Web3 wallet.
There has been anticipation success surrounding Runes, such as the example of PUPS token recording millions of dollars in trading volume daily in April 2024. PUPS is a BRC-20, and BRC-20 PUPS token holders will have claims to Runes PUPS tokens after Runes launches.
All the activity in anticipation of Runes has driven up Bitcoin transaction costs. In the past seven days, transaction fees on the Bitcoin network have ranged from US$6.68 to US$15.13.
Although still lower compared to the peak in December during the Ordinals hype frenzy, this surge has been sufficient to push Bitcoin network transaction costs above those of Ethereum.
Conclusion
the impending launch of Runes, a protocol akin to BRC-20, has sparked considerable interest in the cryptocurrency community, particularly as transaction fees on the Bitcoin network surged ahead of the halving event. Developed by Casey Rodarmor, the creator of Ordinals, Runes represents a novel approach to token issuance on the Bitcoin network, utilizing the UTXO model for increased efficiency.
The announcement of Runes in September 2023 generated significant anticipation, with many drawing parallels to the success of BRC-20. This sentiment was further bolstered when OKX announced its support for Runes on its Web3 wallet in January 2024. The success of tokens like PUPS, a BRC-20 token with substantial trading volume, exemplifies the anticipation surrounding Runes.
However, the heightened activity in anticipation of Runes has led to an increase in Bitcoin transaction costs. Over the past seven days, fees on the Bitcoin network have ranged from US$6.68 to US$15.13, surpassing those of Ethereum. While still lower than the peak seen during the Ordinals hype frenzy in December, this surge underscores the impact of upcoming developments on network dynamics and user costs. As Runes prepares for launch, its potential to reshape token issuance on Bitcoin remains a focal point for the cryptocurrency community, with implications for transaction economics and network scalability.
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