Rune Protocol Set to Launch, Market Speculation Drives Up Bitcoin Transaction Costs

According to The Block, in addition to the discussion of Bitcoin halving itself, the Bitcoin community is also excited about the launch of the Runes Protocol (expected to go live at the same time as the Bitcoin halving). Data shows that recent market speculation on BRC-20 has also driven up transaction fees on the Bitcoin chain.

The Runes Protocol is a new token protocol proposed by software engineer Casey Rodarmor. Prior to this, Rodarmor created the Bitcoin Ordinals protocol in January 2023. The main concept behind Ordinals is to bring non-fungibility to Bitcoin by distinguishing specific satoshis (the smallest unit of Bitcoin) based on their minting order.

The BRC-20 token standard emerged shortly after the release of Ordinals, facilitating the issuance of new fungible tokens on the Bitcoin network.

Runes, to some extent, is similar to BRC-20, aiming to enable the trading of new tokens on the Bitcoin chain. However, unlike BRC-20, Runes will adopt the Unspent Transaction Output (UTXO) model. Essentially, Runes aims to be a more efficient implementation for token issuance, taking into account network congestion. Given the success of BRC-20, many believe that Runes has the potential to become the next major breakthrough.

According to CryptoSlam data, PUPS, a meme coin based on BRC-20, has reached millions of dollars in daily trading volume this month, making it the second-largest NFT/BRC-20 collectible in terms of trading volume in the past seven days. Each BRC-20 standard PUPS token will have ownership of PUPS Runes, and once Runes is launched, these tokens can be exchanged for PUPS Runes.

The speculation surrounding these Runes naturally drives up Bitcoin’s transaction fees. The seven-day moving average of the network’s average transaction fee has risen from $4.11 at the beginning of the month to $12.17 currently. Although this value is still relatively low compared to the peak during the Ordinals speculation in December last year, this surge is enough to surpass Ethereum’s transaction fees.

Source: The Block

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