Original | Odaily Planet Daily

Author | Nan Zhi

Today, Casey, the founder of Ordinals, released the official document of Runes, including setting and functional explanations, as well as specific technical details. According to Casey's previous announcement, the Runes he released will be launched in late April. In this article, Odaily will analyze the functional document and compare it with the BRC-20 token.

What are Runes?

Runes allow the etching, minting, and transfer of native digital goods of Bitcoin transactions. Each inscription is unique, while each unit of Runes is homogeneous and interchangeable, suitable for various purposes.

Runestone

The information of the Runes protocol is called a runestone, stored in the Bitcoin transaction output. The runestone output script starts with "OP_RETURN" and "OP_13", compressed and decoded into a series of 128-bit integers according to the rules specified by Casey, and finally resolved into a runestone. There can only be one runestone per transaction. (For specific operational details, refer to the "Ordinals founder's first discussion of the Runes protocol" in section four.)

Runestones can etch new Runes and mint existing Runes.

Etching

Runes are created through etching, which can create a Rune and set its attributes. Once set, these attributes are immutable. This operation can be understood as the deployment of ERC20 tokens.

Name

The name consists of letters A to Z, with a length between 1 and 28 characters. For example, "UNCOMMONGOODS" can be a Rune name. The name can also include spacing symbols represented by dots to improve readability. "UNCOMMONGOODS" can be etched into "UNCOMMON•GOODS". The uniqueness of a name does not depend on spacing symbols. Therefore, even if different spacing symbols are used, Runes cannot use the same letter sequence as existing Runes.

Premine

The etcher of Runes can allocate a certain number of etched Runes to themselves, which is called Premine and is not mandatory but optional.

(Odaily Planet Daily note: This feature was not considered by Casey in the early days, and its introduction provides the possibility for more complex token economics.)

Divisibility

The divisibility of a Rune refers to how many minimum units it can be divided into. Divisibility is the maximum number of decimal places for the quantity of Runes. Runes with a divisibility of 0 cannot be divided, those with a divisibility of 1 can be divided into ten subunits, and those with a divisibility of 2 can be divided into one hundred, and so on.

(Odaily Planet Daily note: This means users can choose the minimum unit of the token.)

Minting Restrictions

Runes can be publicly minted, open to everyone, and can set minting restrictions. When the specified conditions (referred to as Terms by Casey) are exceeded, minting stops, for example, it can restrict specific start (block) heights, end (block) heights, and an upper limit (quantity).

Other Information

• Identification: Runes have specific Unicode codes. For example, a Rune with a divisibility of 2 and a quantity of 101 units is identified as 🧿, which will be represented as 1.01 🧿.

• Limit: The number of times a Rune can be minted is its limit, and once the limit is exceeded, minting stops.

• Burning: Runes can be burned through methods specified by Casey.

How does it differ from BRC-20?

Underlying Differences

Runes is built on the Bitcoin network's UTXO and attachment information, simulating token operations through the marking of specific information with OP_RETURN. BRC-20 records data in the witness data and has the characteristic of UTXO inflation. This is one of the fundamental reasons why Casey opposes BRC-20, as he believes that the "garbage UTXO" generated by BRC-20 excessively occupies the space of the Bitcoin network and poses potential security issues. (For more details, see "BTC Ecology | Unveiling the story behind Ordinals founder's request for Binance to remove ORDI" in section four.)

On the other hand, Casey believes that the key to the success of BRC-20 lies in its creation of a "fair asset launch" on the Bitcoin network, where everyone can participate and be responsible for their own minting costs. Casey hopes to inherit its advantages while avoiding its technical flaws (UTXO inflation issues).

So, from a token perspective, what are the differences between the two?

Token Differences

• Higher degree of setting freedom

BRC-20 specifies that the token name is fixed to four letters and only the total number of tokens and the quantity of each minting can be set. Runes have a higher degree of openness for names and support the setting of token precision.

• More comprehensive token functionality

BRC-20 tokens only have transfer functionality and only support one-to-one transfer of a single type of token. Runes support complex transfers, including multi-object and multi-token transfers for a single transfer. The setting of minting conditions, pre-allocation, burning, batch airdrops, and a series of other features make Runes more similar to the ERC-20 tokens widely known by users, significantly enhancing its functionality.

Conclusion

Last year, Casey announced that Runes would be launched when the Bitcoin network reaches block height 840,000, around the middle to late this year. During the concept phase of Runes proposed by him in September last year, a large number of Runes tokens and NFTs emerged, including dozens of projects such as Runes Alpha (COOK), Runecoin (RSIC), and Runestone. The release of this document once again heralds the imminent launch of the official version.

As for BRC-20, its second surge in popularity in 2023 was mainly due to the introduction of a new narrative for Bitcoin token issuance, rather than the complexity of its functionality. The decline of BRC-20 is due to network performance limitations and the disappearance of narrative novelty. Runes has made significant improvements in functionality, but this is not a sufficient condition to attract a large number of users. Whether Casey can bring about another growth for the Bitcoin network with Runes remains to be seen.

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