Runes Dominate Bitcoin Transactions By Nearly 70%! But Can They Fuel Miners Long Term?

Bitcoin Runes have swiftly become the dominant token standard on Bitcoin, facilitating nearly 70% of network transactions, processing over 3.38 million transactions with a daily peak of 750,000.
Runes Dominate Bitcoin Transactions By Nearly 70%! But Can They Fuel Miners Long Term?

Key Insights

  • The new Bitcoin Runes have become the dominant token standard on Bitcoin, processing nearly 70% of all transactions on the network.

  • Data shows over 3.38 million Rune transactions processed so far, with a peak of 750,000 in a single day on 23 April.

  • Demand for Runes appears to be driven by memecoin and NFT enthusiasts, who are using it to inscribe "rare satoshis".

  • While initially contributing over 72% of miner fees, Runes have settled at around 18.89%, still higher than Ordinals and BRC-20s.

  • Some developers worry that Runes, like Ordinals before them, are congesting the network and straying from Bitcoin's original purpose.

Similar to the success of the Ordinals protocol in January 2023, the Runes protocol has not disappointed since its launch on the April 20 Bitcoin halving date.

So far, it appears that this new fungible token standard on the Bitcoin network is doing “a little too well”, and has now become THE dominant token standard on Bitcoin.

At the time of writing, Rune transactions now account for nearly 70% of all the transactions on the Bitcoin network.

And while enthusiasts are thrilled by this new development and the opportunities it presents, we are seeing something similar to the Ordinals war from 2023 happen again.

Rune Transactions are Surging!

According to data from Dune Analytics, Bitcoin Runes has processed more than 3.38 million transactions so far, with the numbers stacking up every minute.

<div class="paragraphs"><p>Bitcoin rune metrics</p></div>

Bitcoin rune metrics

Moreover, we have over 1.8 million number of Rune mints

Interestingly, this accounted for around 70% of all Bitcoin transactions on average this week, allowing regular Bitcoin transactions to have only about 19% dominance on 23 April, this week.

<div class="paragraphs"><p>Bitcoin Runes increasing in popularity</p></div>

Bitcoin Runes increasing in popularity

Ordinals and BRC-20s on the other hand, had a meager 0.1% and 0.2% shares respectively.

Moreover, right around the same time, Rune transactions recorded an all-time high of around 750,000 transactions processed in a single day, with the current figure having halved since then, as of Thursday this week.

Memes and Rare Satoshis

It is generally believed that most of the demand for Runes is based on the idea that it is a new Bitcoin-based technology.

Most of the Rune inscribers so far, have been memecoin and NFT enthusiasts, competing to inscribe and etch what they call “rare satoshis” using the Runes protocol.

For some context, “rare satoshis”, also known as “Rare Sats”, according to ByBit, are satoshis (or the smallest units of a single Bitcoin) that possess rare/unique properties, like being the first satoshi to be mined in a block.

Check out the Rodarmor Rarity Index on Magic Eden to learn more.

The Issue with Miners and Fees

The miners had a field day on the Bitcoin halving event.

Recall that the Runes protocol launched on the same day as the halving—It turns out that Runes transactions played a massive role in miner fees, contributing to more than 72%.

However, since then, this figure has normalized to around 18.89%, while still beating Ordinals and BRC-20s.

<div class="paragraphs"><p>Bitcoin transaction share of fees</p></div>

Bitcoin transaction share of fees

However, at the same time, we are seeing something similar to the Ordinals war from 2023 happening again.

Recall that sometime last year, Bitcoin core developer, Luke Dashjr took to Twitter to accuse Bitcoin ordinals and its supporters of “clogging up” the blockchain with spam transactions (he meant the ordinals).

Keep in mind that Bitcoin Runes, to begin with, were introduced as a more efficient way to mint new tokens on the Bitcoin network, compared to the existing BRC-20 token standard.

However, not everyone is buying it.

People like Nikita Zhavoronkov, a lead developer at Blockchair, have also taken to a Twitter post, to express his reservations.

<div class="paragraphs"><p>The issue with Bitcoin Runes</p></div>

The issue with Bitcoin Runes

He believes that Bitcoin’s core values are being eroded, and the network is becoming less and less of the peer-to-peer cash system that Nakamoto conceived.

Overall, the future of Bitcoin Runes remains to be seen.

Whether it will serve as a benefit to miners or add to the ongoing congestion that Dashjr and Zhavoronkov complain about is still under speculation, and only time will tell what becomes of Bitcoin runes.

Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.

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