Bitcoin Ordinals founder Casey Rodarmor released the Runes documentation on March 27, 2024. The Runes protocol, developed by Casey Rodarmor, aims to enhance Bitcoin’s functionality by introducing a UTXO-based tokenization model that offers a simpler and more efficient alternative to traditional protocols like BRC-20 and ORC-20.
Runes simplifies the creation and management of tokens by allowing multiple tokens to be stored in a single UTXO, which brings about more efficiency compared to address-based or off-chain protocols.
The protocol is designed to offer a user-friendly experience without the need for additional infrastructure, resulting in compatibility with the UTXO model of Bitcoin.
Casey Rodarmor’s release of the Runes documentation signifies a significant step in the development and introduction of the protocol to the Bitcoin ecosystem. This also reflects a growing interest in enhancing Bitcoin’s capabilities and addressing challenges in tokenization protocols.
Bitcoin Ordinals involves assigning numerical values to Satoshis (sats), the smallest units of Bitcoin, to create unique Digital Artifacts directly on the blockchain. These inscriptions can contain various content like text, images, or videos, stored in the witness portion of a Bitcoin transaction.
Ordinal theory provides a method for identifying and tracking individual sats to enable the generation of unique digital assets, including NFTs, on the Bitcoin blockchain. With the 2021 Taproot upgrade, inscriptions of up to nearly 4 MBs in size are now possible, allowing for more complex creations.
The history of Bitcoin Ordinals traces back to the introduction of the Colored Coins protocol in 2012, which marked the initial step towards creating non-fungible tokens (NFTs) on the Bitcoin network. Colored Coins are bitcoins with unique marks that distinguish them from standard bitcoins. This laid the foundation for tokenization on top of the Bitcoin blockchain.
Despite the challenges posed by limited smart contract functionality on Bitcoin and the absence of a token standard like ERC-721 on Ethereum, the concept of NFTs on Bitcoin persisted over the years, with the huge success achieved in January 2023 when Ordinals was launched.
