bitcoin, Solana, ethereum, and even Cardano are slowing down after sharp price contractions over the past few days. The price drop means that enthusiasm has been dampened, which negatively impacts on-chain activity.
Runes Take Over bitcoin
However, as the cryptocurrency market recovers from last week's blow, news is emerging that the Runes Protocol is taking over the bitcoin network. Its creator claims that Runes, which launches a new token minting standard on the bitcoin network, is x.com/ord_io/status/1811616183117906289″ target=”_blank” rel=”noopener nofollow”>responsible for 69.1% of all transactions in the last 24 hours.
This means that only about 40% of all other transactions were made by users interested in transferring capital from one address to another. bitcoin is designed to enable the borderless transfer of funds in a cheap and efficient manner.
That was until the Taproot upgrade, which was intended to scale the bitcoin network and make transactions more private. However, the upgrade also caused a flaw that opened a vector for users to store files, including images or audio, on-chain.
For this reason, the number of registrations on the network skyrocketed in 2021, coinciding with the nft boom. Since the bitcoin Halving on April 20, more Runes have been “minted” on the chain despite the fact that the number of processed transactions has decreased over the past three months.
Users can create inscriptions similar to non-fungible tokens (nfts), which are stored on-chain via Runes. This is possible because the standard takes advantage of the network structure.
The protocol leverages bitcoin's UTXO model and introduces improvements that allow users to mint and manage tokens efficiently. The standard improves on BRC-20 by introducing a 13-character limit for ticker symbols. and reduce the number of steps users must take to mint tokens. Because of this, there is a significantly smaller “on-chain footprint,” resulting in less spam.
Rising btc transaction fees benefit miners
Whether more runes will be minted in the future remains to be seen, however. The rise in the number of inscriptions, especially on platforms like bitcoin, which inherently lacks smart contracts, has been blamed for rising transaction fees.
At spot rates, the average transaction fee has come down, but is still above $1, according to Blockchain.comIt has been falling since April 20, when users rushed to register their items in the Halving block, pushing transaction fees above $50.
Although some quarters frown upon it, the rise of runes and inscriptions on bitcoin is welcomed by miners now that revenues have been halved after April 20. The more transactions are recorded, the higher their revenues will be, as each block, regardless of inscription density, is confirmed and added to the longer chain.
Featured image from Canva, chart from TradingView