What is Rune Protocol?

It aims to streamline and optimize how digital assets are created, managed, and transacted on the Bitcoin network by introducing a more efficient token standard that minimizes network congestion and enhances transaction speeds.

Runes are set to launch in April 2024, coinciding with the upcoming Bitcoin halving.

How Runes Protocol Works

Bitcoin Runes works by using unspent fragments of Bitcoin to start transactions, almost like using digital spare change to create new transactions. It meticulously tracks each Bitcoin back to its source to ensure that every asset is genuine, giving users confidence in what they hold or receive.

Unlike some protocols that rely on off-chain data or special tokens, Bitcoin Runes makes full use of Bitcoin's built-in capabilities for on-chain data storage. This helps prevent the build-up of unnecessary UTXOs, making the network run more smoothly.

Additionally, the protocol uses the OP_RETURN function to add data to transactions on-chain, similar to leaving a secret note with a Bitcoin transaction without changing the actual Bitcoin itself. This makes transactions more efficient and reduces strain on the network, making things better for users.

For those interested in learning more about the Rune Protocol, you can click on the following link