Bitcoin Ordinals Creator proposes alternative to BRC-20 Token Standard

The creator of Bitcoin Ordinals, Casey Rodarmor, is proposing a new Bitcoin-based fungible token protocol as a potential alternative to the BRC-20 token standard. Casey Rodarmor mentioned that a fungible token protocol like Runes wouldn’t leave as much “junk” on the Bitcoin network as that of BRC-20 tokens.

The BRC-20 standard was launched by anonymous developer “Domo” in March. The BRC-20 market cap reached $1 billion within two months, with notable BRC-20 tokens like PEPE and ORDI being created on Bitcoin. 

New terrible idea just dropped: Runes.

A worse-is-better fungible token protocol for Bitcoin.https://t.co/TPVrUvWxm8

— Casey (@rodarmor) September 25, 2023

BRC-20 allows the minting and transfer of fungible tokens via the Ordinals protocol on Bitcoin. In a statement, Rodarmor mentioned that BRC-20 tokens have the issue of spamming the Bitcoin network with “junk” unspent transaction outputs (UTXOs), despite their potential.

In a Sept. 25 blog post, he explained that BRC-20 tokens have the “undesirable consequence of UTXO proliferation,” proposing Runes as a UTXO-based alternative.

https://rodarmor.com/blog/runes/

TLDR on Runes – A potential fungible token protocol for Bitcoin

ᚱᚢᚾᛖᛊ

– Casey remains skeptical, citing "99.9% are scams and memes," but recognises they don't appear to be going away.
– Employs a UTXO-based system, notably simpler than BRC-20.
– Uses the letter 'R' in the… https://t.co/zYP43f70gh

— Franken (@ItsFranken) September 25, 2023

Rodarmor added; “If this protocol had a small on-chain footprint and encouraged responsible UTXO management, it might serve as harm reduction compared to existing protocols,”.

UTXOs represent the amount of cryptocurrency left in a wallet following a completed transaction, where the balance is used in subsequent transactions and is stored in the UTXO database.

Bitcoin’s UTXO model contributes to making Bitcoin an auditable and transparent ledger by preventing the double-spending problem.

“Other fungible token protocols on Bitcoin, such as Good for Bitcoin, Counterparty, and Omni Layer, have problems of their own” Rodarmor stated.

While acknowledging that 99.9% of fungible tokens are associated with scams and memes, Rodarmor believes the right fungible token protocol can add value to the Bitcoin network:

“Creating a good fungible token protocol for Bitcoin might bring significant transaction fee revenue, developer mindshare, and users to Bitcoin.”

Rodarmor mentioned that he came up with the idea for Runes just last week, and during a Sept. 25 Twitter Spaces session with co-host Trevor Owens from The Ordinals Show, he expressed uncertainty about whether he would further pursue it. 

Shortly after the call, Owens floated offering $100,000 from the Bitcoin Frontier Fund to prospective developers who can get a Rune application up and running as a means to further Rodarmor’s proposal.

Open $100k investment offer in upcoming @BTCFrontierFund accelerator for first team who can get a working (not terrible) Rune indexer, issuance and/or transfer app, up live and running

Don't make the tickers required to be unique, will be a shit show

DM me. Serious offer. pic.twitter.com/6W0IwlhB9x

— trevor.btc (@TO) September 26, 2023

Read also: Chronicle Labs unveils decentralized Oracle protocol for Web3 dApps