Key Points
- The Runes protocol, which will facilitate the creation of fungible tokens on the Bitcoin network, is set to launch on the day of the 2024 Bitcoin halving.
- Since the launch of the Ordinals protocol, Bitcoin has seen a cultural shift, with thousands using the network daily to acquire assets priced in Bitcoin.
The 2024 Bitcoin halving is anticipated to be a significant event in the cryptocurrency world, with the introduction of the Runes protocol – a tool for creating fungible tokens on the Bitcoin network – scheduled for the same day. This development could mark a pivotal moment in the history of Bitcoin.
The Impact of the Ordinals Protocol
The Ordinals protocol, launched in December 2022, has sparked a cultural shift in the largest blockchain on the planet, often referred to as “The second phase of Bitcoin.” This protocol has enabled users to put images, audio, and code files on the Bitcoin blockchain.
Following the successful launch of the Ordinals protocol, developer Casey Rodarmor introduced the Runes token protocol. This protocol is set to activate during the Bitcoin halving, sparking a competition for block space where players will vie to issue the first tokens and the best token names.
Global Preparation for the Runes Protocol
Global exchanges are preparing to list the main tokens that will launch with the Runes protocol. Marketplaces and DEXes, such as Magic Eden and OKX, have announced their support for tokens created from the Runes protocol from day one.
Unlike Ethereum and Solana, which are known for application development and issuing and exchanging other assets, Bitcoin has historically been perceived as an asset with no special purpose. However, since the launch of Ordinals, thousands of people have been using the Bitcoin network daily to acquire assets priced in Bitcoin. In just over a year, over $3 billion has been moved through these Ordinal assets, involving nearly 600,000 unique wallets and 2.5 million on-chain transactions.
The Ordinals protocol has had a profound cultural impact on Bitcoin, leading to a period known as “the second phase of Bitcoin,” characterized by a resurgence of accelerated innovation around the world’s largest blockchain.
The Future of Bitcoin and the Runes Protocol
The upcoming halving block is expected to be the most contested and lucrative block in history. One miner who mines the halving block will collect a satoshi classified as “Epic,” with an estimated value of more than $1 million.
In anticipation of Bitcoin network congestion, some projects are developing solutions to scale trading on the Runes protocol. For example, RuneChain, a Bitcoin layer-2 focused on Runes, is emerging alongside other platforms.
Furthermore, the market has been experiencing a “pre-Runes season.” Some Runes-standard tokens have already been “pre-distributed” through airdrops to Bitcoin NFT holders. Each collection uses its own distribution model: Some took snapshots of NFT holders and will distribute tokens after the halving, while others will distribute tokens based on the duration that users have held their NFTs.
Bitcoin’s second season is approaching one of its most climactic moments. Runes tokens will become historic, loved, hated, transformative, frightening, necessary, exhausting, and everything imaginable at the same time. But they will happen, and nothing will stop them.
This article was written by Lugui Tillier, the business development director of Lumx, a Web3 studio in Rio de Janeiro that counts BTG Pactual Bank, the largest investment bank in Latin America, among its investors.