
Three Minutes to Understand Runes: A Minimalist Bitcoin Asset Issuance Protocol
TechFlow Selected TechFlow Selected

Three Minutes to Understand Runes: A Minimalist Bitcoin Asset Issuance Protocol
Runes aims to solve the inefficiencies of BRC-20.
By Web3CN
In a recent tweet, Casey Rodarmor revealed his proposal for a fungible token protocol on Bitcoin: the Runes Ordinal Protocol. This proposal has sparked widespread interest and discussion around fungible tokens within the BTC ecosystem.
Although controversial in some circles, this type of token has already established a certain presence in the blockchain space. Their persistence is undeniable, and their development reflects broad acceptance of innovation within the Bitcoin community.
In this article, we will delve into the Runes protocol, exploring its fundamental principles, the urgency of its need, comparative analysis with existing protocols, and more. In examining this new protocol, we will uncover its potential challenges within the evolving context of the Bitcoin ecosystem.
Why Do We Need a New Protocol?
In the ever-evolving field of blockchain and cryptocurrency, redundancy is common. With numerous protocols emerging seemingly every day, one might wonder: do we really need so many protocols?
The answer lies in both opportunity and necessity. There are several potential benefits to building a robust fungible token protocol specifically for Bitcoin:
Revenue Streams: A well-designed protocol can unlock significant transaction fee revenue. As adoption grows, so too does the economic incentive for miners and the entire network.
Developer Interest: By offering a simplified and efficient system, such a protocol can attract developer attention.
User Base Expansion: A new protocol can draw in a broader user base. This isn't just about quantity, but diversity. Different users bring different use cases, enhancing the ecosystem's variety and resilience.
Addressing Current Deficiencies: Existing protocols, while pioneering, exhibit various inefficiencies and limitations. A new protocol, learning from past experiences, can pursue a more optimized design.
In technology, stagnation equals regression. Reimagining and reinventing upon existing foundations is valuable—especially when aiming to resolve current flaws and unlock untapped potential.
Comparison of Current Protocols
Fungible token protocols for Bitcoin are not new. Several have been proposed and implemented, each with unique strengths and weaknesses. Let’s examine some of the more notable ones:
BRC-20: Known for its association with inscriptions, its design was driven more by trending technology than efficient engineering. The result is a highly inefficient protocol requiring multiple transactions even for basic operations like token issuance and transfers.
RGB: A relatively complex protocol that relies heavily on off-chain data, its development has been delayed and its application scope limited.
Omni Layer: This protocol introduced native tokens required for certain operations. While innovative, it added extra complexity and reduced adoption potential.
Taproot Assets: Though advanced, this protocol depends significantly on off-chain data, potentially creating implementation and user experience hurdles.
Amid this landscape, the newest contender, Runes, promises simplicity and efficiency. By adopting a UTXO-based system and utilizing the 'R' tag in output scripts, it offers greater user-friendliness and better alignment with Bitcoin’s native structure. However, like any new proposal, its real-world performance remains to be tested.
Runes: A Breath of Fresh Air
Against the backdrop of existing protocols—each facing their own set of challenges—Runes emerges as a beacon of simplicity in a complex landscape. Conceived by Casey Rodarmor, the innovator behind the Ordinals protocol, Runes aims to address the inefficiencies of earlier protocols, particularly BRC-20.
Origins: It all began with a rough blog post outlining the concept. Rodarmor launched Runes within seven hours of announcing it—an illustration of the crypto community’s agility.
Mechanism
Core Simplicity: Unlike multi-layered protocols, Runes features an elegant and simple design. Using OP_RETURN in transactions, it assigns tokens to specific UTXOs, specifying output index, token amount, and token ID. This streamlined mechanism is not only easy to understand but also operationally efficient.
Issuance and Circulation: The protocol clearly defines token flow and distribution, reserving a special message for initial token issuance. This ensures clarity and transparency in token operations.
The Principles Behind Runes
At its core, Runes seeks to fix BRC-20’s shortcomings. Despite BRC-20’s wide adoption, its reliance on inscriptions has led to inefficiencies—resulting in lengthy, multi-step transactions for basic operations. In contrast, Runes aims to simplify the process, streamline token operations, and improve on-chain efficiency.
Proceed with Caution
Yet, despite its promising appearance, Runes also highlights a recurring theme in crypto: rapid adoption of ideas without thorough review or long-term design consideration. Runes’ swift acceptance echoes the same fervor once surrounding BRC-20, which ultimately contributed to its current challenges.
Within the grand narrative of crypto innovation, Runes stands out with its promise of simplicity and efficiency. But like all newcomers, the journey from concept to widespread adoption will be the true test of its viability.
The BRC-20 Dilemma
At first glance, BRC-20 may seem like a promising addition to the Bitcoin ecosystem. However, closer inspection reveals a complex and often inefficient mechanism for fungible tokens.
Complexity: BRC-20’s main challenge stems from its intrinsic link to inscriptions. This integration was not born from engineering rationale but from trend-driven thinking. While inscriptions are a "hot" novelty, they are far from ideal for token protocols.
Operational Inefficiency: A major flaw in the BRC-20 protocol is its multi-step nature. Whether issuing or transferring tokens, BRC-20 requires multiple transactions. This directly results from using inscriptions to encode token data on-chain, necessitating "preparatory transactions" before actual inscription data is recorded.
Efficiency Comparison: Compare this with protocols like OmniLayer or the newly proposed Runes—all capable of executing token issuance and transfers in a single transaction—while BRC-20 lags behind, requiring two. This inefficiency is not merely a technical oversight; it's a sign of being driven more by hype than sound design.
The bigger picture: The issues surrounding BRC-20 are not isolated technical failures but reflect deeper problems in protocol design and adoption.
BRC-20’s adoption and popularity stem from its fair launch approach and early adopters enthusiastically spending money and promoting it on social media. This organic growth and community-driven support propelled BRC-20 to its current status, demonstrating the power of grassroots movements in crypto.
Final Thoughts
From the complexities of BRC-20 to the bright promise of Runes, this journey offers valuable insight into the ongoing evolution of blockchain and Bitcoin. Every twist, every challenge and solution, paints a picture of an ecosystem thriving on innovation, yet struggling with its own rapid pace.
As the Runes protocol steps into the spotlight, it carries forward lessons from the past and hope for a simplified future. Its promise of simplicity and efficiency is compelling—but the responsibility lies with the community to embrace it with both enthusiasm and caution.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News














