Rune Protocol - BIGGEST opportunity in 2024🧿¤

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There has been a lot of activity in the Bitcoin and Ordinals space. Currently, we are in a slow market concerning Ordinals. Moreover, a significant event for Bitcoin, known as the Bitcoin halving, is taking place.

However, what everyone has been talking about over the last few days is Runes, runestones, or the Rune protocol.

Everyone is (rightly) hyped about this launch. But do we really know what it's for and what it does?

Let's dive into that.

Table of Contents

• Runes

• Runestones

• Etching

  • Difference between Runes and Bitcoin (Etching)

• Symbol

• Terms

• Minting & Transferring

• Edicts

• Pointer

• Burning

• Why is this such a great opportunity?

Runes

Runes allow Bitcoin transactions to etch, mint, and transfer Bitcoin-native digital commodities.

Whereas every inscription is unique, every unit of a rune is the same. They are interchangeable tokens, fit for a variety of purposes.

Runestones

Rune protocol messages, called runestones, are stored in Bitcoin transaction outputs.

A transaction may have at most one runestone.

A runestone may etch a new rune, mint an existing rune, and transfer runes from a transaction's inputs to its outputs.

A transaction output may hold balances of any number of runes.

Runes are identified by IDs, which consist of the block in which a rune was etched and the index of the etching transaction within that block, represented in text as BLOCK:TX. For example, the ID of the rune minted the 20th transaction of the 500th block is 500:20.

Etching

Runes come into existence by being etched. Etching creates a rune and sets its properties. Once set, these properties are immutable, even to its etcher.

Difference between Runes and Bitcoin (Etching)

The concept of 'etching' as described in the article introduces a fundamental difference between runes and Bitcoin itself.

In Bitcoin, the process of transactions and mining in the blockchain mainly refers to verifying transactions and adding new blocks to the blockchain.

With runes, on the other hand, the concept of 'etching' introduces a way to create unique digital goods or tokens directly within the Bitcoin blockchain. By etching a rune, a unique object is created with specific, immutable properties, such as name, divisibility, symbol, and possibly other rules around minting or transferring these runes. This makes each rune unique and distinguishable within the system, unlike bitcoins, which are fungible and do not differentiate between individual units beyond their value.

Symbol

A rune's currency symbol is a single Unicode code point, for example $, ⧉, or 🧿, displayed after quantities of that rune.

101 atomic units of a rune with divisibility 2 and symbol 🧿 would be rendered as 1.01 🧿.

If a rune does not have a symbol, the generic currency sign ¤, also called a scarab, should be used.

Terms

A rune may have an open mint, allowing anyone to create and allocate units of that rune for themselves. An open mint is subject to terms, which are set upon etching.

Cap
The number of times a rune may be minted is its cap. A mint is closed once the cap is reached.

Amount
Each mint transaction creates a fixed amount of new units of a rune.

Start Height
A mint is open starting in the block with the given start height.

End Height
A rune may not be minted in or after the block with the given end height.

Start Offset
A mint is open starting in the block whose height is equal to the start offset plus the height of the block in which the rune was etched.

End Offset
A rune may not be minted in or after the block whose height is equal to the end offset plus the height of the block in which the rune was etched.

Minting & Transferring

While a rune's mint is open, anyone may create a mint transaction that creates a fixed amount of new units of that rune, subject to the terms of the mint.

When transaction inputs contain runes, or new runes are created by a premine or mint, those runes are transferred to that transaction's outputs. A transaction's runestone may change how input runes transfer to outputs.

Edicts

What does ‘edicts mean?

Edicts, as described in the article, are a mechanism within the rune protocol that allows for the distribution or allocation of runes in a Bitcoin transaction according to specific rules.

An edict consists of three main components: a rune ID, an amount, and an output number.

Pointer

After all edicts are processed, remaining unallocated runes are transferred to the transaction's first non-OP_RETURN output. A runestone may optionally contain a pointer that specifies an alternative default output.

Burning

Runes may be burned by transferring them to an OP_RETURN output with an edict or pointer.

Why is this such a great opportunity?

So, that was the technical part. Now, of course, you want to know why this is the opportunity of 2024?

Runes are kicking off a cool new wave for fungible tokens over on the Bitcoin network, and honestly, it's something everyone in the Bitcoin and crypto space should be keeping an eye on.

These aren't just any other tokens. Runes are stepping up to shake things up against the likes of BRC-20, Taproot Assets, RGB, and more, with a fresh UTXO-based way of keeping track of balances. So, we can wave goodbye to those clunky off-chain or account-based systems.

They're planning to hit the scene at block height 840,000, which is right around April 20, smack dab during a Bitcoin halving event. Talk about perfect timing! This launch could really shake things up for how tokens work on Bitcoin when it matters most.

With Runes, creating and handling fungible tokens on Bitcoin could get a whole lot easier and user-friendly. This protocol is all about making the most of Bitcoin's solid foundation to make token stuff simpler and cooler for both developers and the rest of us.

As Runes get ready to roll out, they're marking a big leap forward in how Bitcoin grows and does its thing. They're all about adding more room for NFTs and fungible tokens, potentially cracking open a whole new world of possibilities on Bitcoin.

Right now, there's a whole bunch of Rune-related projects popping up everywhere - with Magic Eden leading the charge as the go-to spot for all things Inscriptions. RSIC, Runestones, Rune Pups, GoB, and heaps of others are laying down the tracks for what's being called the Runes Era.

Perhaps most importantly, we all know what happened with $ordi.