Introducing Runes: A Homogeneous Token Protocol Based on Bitcoin UTXO, by Ordinals Founder Cesay

Source:
Runes Chinese Community
Author:
Jasmine

Founder Cesay of the Ordinals and Runes protocols detailed the homogenized token protocol Runes, which will be launched in April coinciding with the Bitcoin halving, in the latest episode of the hellmoneypod podcast.

Contents:
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1. What are Runes?
2. What does Runes based on UTXO mean?
3. How to issue (etch) a new Rune?
4. How to transfer Runes?
– What is OP_Return output?
– How to transfer to a specific output or address?
5. Runes compatible with SPV wallets
6. Brc20 vs Runes
7. What are the Alphas?

Runes is a protocol for issuing homogenized tokens on the Bitcoin network. According to Casey, Runes does not issue “garbage” coins, but provides a place to issue “garbage” coins. The core of this protocol is based on UTXO and is designed to be very concise.

UTXO stands for “Unspent Transaction Output”. In the Bitcoin network, during the transaction process, some existing inputs need to be selected, consumed, and new UTXOs are generated. These new UTXOs can then be used as inputs for future transactions.

Runes based on UTXO means that transaction outputs can not only contain Bitcoin, but also different quantities and types of Runes. For example, a transaction output can contain 1 Bitcoin, 100 A Runes, and 1000 B Runes at the same time.

The issuance process of Rune tokens is called “etching”. Each Rune name is unique and can be composed of uppercase letters A-Z and the “•” symbol.

To balance the issuance pace of Runes and prevent popular and short-named Runes from being quickly occupied in the initial stage, the Runes protocol requires a minimum name length of 13 letters for the first four months after launch, such as “PEPE•IS•AWESOME”.

Afterwards, approximately every four months, the minimum name length decreases by one letter until the next halving event, when Runes with single-character names (a total of 26) can be created.

The issuance of Runes adopts the Commint-Reveal mechanism to prevent miners from knowing the name of the Rune in advance and rushing to get it.

The unit of Rune tokens can be a traditional currency unit, such as $, or any Unicode emoji. This design makes Rune tokens more interesting and personalized, such as “100 ? PEPE•IS•AWESOME”.

Although Casey is the founder of Ordinals, Runes is not based on the Ordinals protocol. When transferring Runes, the sorting of inputs and Sats is not crucial, but the sorting of outputs directly affects the result of the transfer. Usually, in a transaction, all the Runes in the inputs will be transferred to the first output by default. However, by constructing an OP_Return output, it is possible to direct Runes to a specific output.

OP_RETURN is an opcode in the Bitcoin transaction scripting language used to mark a transaction output as unspendable, while allowing up to 80 bytes of arbitrary data to be embedded in the Bitcoin blockchain. Therefore, OP_Return output can be seen as a type of output that is only used to carry data and cannot be used for transactions.

In theory, if the output does not contain OP_Return or if OP_Return does not contain any data, all Runes will be transferred to the first non-OP_Return output by default. For example, if you have 100 A Runes and want to transfer 25 to Xiao Ming while keeping 75, you can set the first output of the transaction as OP_Return, set the second output as your own address, and set the third output as Xiao Ming’s address. In the OP_Return, state that you want to transfer 25 Runes to the third output (Xiao Ming’s address), then the remaining 75 Runes with unspecified recipient addresses will be automatically transferred to the first non-OP_Return output (your own address).

Students developing Runes wallets, please note:
SPV (Simple Payment Verification) wallet is a lightweight Bitcoin wallet that only downloads and verifies block header data related to user transactions, instead of downloading the entire blockchain. Users can use SPV wallets to manage and use Rune tokens, enjoying a lightweight, concise, and fast transaction experience.

Casey believes that the success of Brc20 lies in its creation of the open mint model, which allows everyone to participate in the minting process. Casey acknowledges the success of Brc20 and states that Runes should learn from its advantages while avoiding its technical flaws (mainly the problem of inflated garbage UTXOs).

Rune provides two issuance methods: fixed total supply (project party can pre-mine) and Open Mint (fair launch, project party cannot pre-mine). Casey believes that the current market is filled with various speculative activities, everyone is striving to be the first Rune, and the first Rune will become the “Shenlin Point”.

To prevent the first Rune from being taken or pre-mined by VCs or project parties, Casey decided to hardcode the first 10 Runes (Rune 0 – Rune 9) into the Runes protocol, only supporting open mint, allowing everyone to participate fairly and play together.

Currently, he is collecting interesting and memeable token names, units, and minting rules from the community. Here, Casey mentioned several names that he finds interesting, such as COMMUNISTRUNE, ANARCHISTRUNE, CYBERPUNKRUNE, and so on.

Friends with big imaginations and good at memes can provide suggestions and submit the form here: https://docs.google.com/forms/d/e/1FAIpQLSd9etAFSzDzSQFHlLDJJMyv_LLnjaUCqWtyQxNCv8SeuUbsug/viewform

Finally, Casey bluntly states that 99.9% of homogenized tokens are scams. Let’s not pretend to change the world in a grandiose manner, but honestly admit that this is an industry full of gambling and speculation. Treat everyone with sincerity. IT’S JUST FOR FUN!

This article is authorized to be reproduced from PANews.

Hell Money podcast link

Related articles: “Bitcoin Ordinals Protocol Founder Releases New Protocol Rune, Can’t Stand BRC Anymore?” “How does Vitalik view Bitcoin Ordinals: Builder is finally getting things done!” “Bitcoin developer Jimmy Song compares Ordinals to a scam of altcoins, using Bitcoin’s reputation to ‘pump and dump’.”

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