Bitcoin Runes, once a rising star in the Bitcoin ecosystem, have seen their popularity plummet, now accounting for just 1.67% of daily Bitcoin transactions, down from their peak earlier this year. The decline raises questions about whether meme coins and AI agents are overshadowing Runes, despite Bitcoin’s overall growing relevance.
The Fall of Bitcoin Runes
📉 Declining Activity:
New wallet interactions and minting activity have dropped to record lows.Daily transaction fees for Runes are under $250,000, a stark contrast to the network-wide fees of $62.55M on April 20, 2024.
⚙️ Protocol Overview:
Runes revolutionized tokenization on Bitcoin ($BTC ) by leveraging the UTXO paradigm and OP_RETURN opcode, improving efficiency over older standards like BRC20. However, its decline indicates waning user interest as the initial novelty fades.
Shifting Focus: Meme Coins and AI Agents
🤑 Meme Coins’ Dominance:
Meme coins like $DOGE , $WIF , and FLOKI have captured investor attention with their blend of humor and financial potential.
🤖 AI Agents on the Rise:
AI agents, autonomous programs designed for specialized tasks, are proliferating rapidly, drawing significant investment and user interest.
These emerging sectors appear to have diverted attention and resources from protocols like Bitcoin Runes.
Bitcoin’s Big Picture: Growth Amid Shifts
🔹 New Highs:
Bitcoin reached an all-time high of $108,202 before settling at $96,102, highlighting its resilience and appeal.
🔹 Spot ETF Outflows:
On December 25, Bitcoin ETFs saw $338.4M in outflows, marking the fourth consecutive day of declines.Major contributors:BlackRock’s IBIT: $188.7MFidelity’s FBTC: $83.2MArk Invest’s ARKB: $75M
🔹 Future Outlook:
Analysts predict significant rebounds:
Fundstrat’s Tom Lee projects BTC at $250K by 2025.Max Keiser envisions long-term highs of $2.2M.
When Bitcoin’s price stabilizes, attention may return to ecosystem projects like Runes and Ordinals, revitalizing interest in their unique capabilities.
While meme coins and AI agents dominate the spotlight, Bitcoin Runes may see renewed relevance as market dynamics evolve. Meanwhile, Bitcoin’s rising price and ETF adoption ensure its continued dominance in the crypto landscape.
#BitcoinRunes #memecoins #AIAgents #CryptoNews #TheCoinRepublic

What Are Runes in Bitcoin? 
Runes are fungible tokens issued directly on Bitcoin using the Runes protocol. Ordinals creator Casey Rodarmor proposed the new protocol in September 2023, pitching it as a better and simpler alternative to the experimental BRC-20 standard for fungible tokens. 

Unlike other fungible token protocols for Bitcoin, Runes doesn’t require off-chain data or a native token to operate. For instance, the Taproot Assets Protocol uses UTXOs but stores asset metadata off-chain. Alternatively, Counterparty, a protocol built on top of the Bitcoin blockchain, requires a native token for some operations and is not UTXO-based.
The Bitcoin community has reacted to the Runes protocol with much enthusiasm that the first Rune token, $RUNE , was issued on the same day Rodarmor made the announcement. 
How Does the Runes Token Standard Work?

Now, let’s take a look at how the Runes protocol works. 
Runestones
Messages on the Runes protocol are known as runestones (not to be confused with the Runestones Ordinals collection). They can etch new tokens, mint existing tokens, and transfer runes from transaction inputs to outputs. 
Runestones are held in Bitcoin transaction outputs that begin with OP_RETURN, a special function that stores data on the Bitcoin blockchain. At most, one rune may be included in a transaction.
How to Setup a Bitcoin Node and Mint Runes
Xverse encourages everyone to setup a Bitcoin node to reinforce Bitcoin's principles of decentralization. Running a node for minting and etching Runes is only recommended for those who know how to run a command line and have advanced technical experience.
Xverse is working with many partners in the ecosystem to offer all the same services and more to make it easy for anyone to get started with Runes. While the ecosystem of Runes minting and etching services is swiftly growing, some users may still prefer to run their own Bitcoin node rather than rely on third-party services.

Creating Rune Tokens
Creating a new Rune token begins with etching, where elements such as name, token supply, number of decimals, and minting terms are defined. The token supply is assigned to a specific UTXO, allowing a single UTXO to contain any amount of any number of Runes, be it a billion, million, or less. UTXOs are used to keep track of the Rune token balances.
Here’s the code used to etch a new Rune token:

It’s important to avoid errors or cenotaphs when etching runes because those tokens will be unmintable.
Minting & Transferring
The next steps after etching are minting and transfer. Minting generates the actual tokens according to the set terms, while Runes tokens are transferred from transaction inputs to outputs using edict messages. The transfer function splits a UTXO into several new UTXOs holding different amounts of runes to send records to recipients.
An edict is made up of a Rune ID block height and transaction index, the output number, and the amount. The Rune ID is used to identify tokens, and it comprises the block in which a rune was etched, as well as the index of the etching transaction stored within that block. 
The mint and transfer code structures are as follows:

Data Storage 
Ordinal inscriptions are created by adding content like images, audio, and HTML files into the witness section of a Bitcoin transaction. The witness section was introduced by the SegWit upgrade, which changed the Bitcoin transaction format by dividing it into two parts. The first part holds the wallet addresses of the sender and receiver, while the witness segment contains transaction signatures.

The Runes Ecosystem Is Growing
With Runes scheduled to go live on the date of the next Bitcoin halving, Bitcoin builders are already gearing up for the launch by building the supporting infrastructure for Runes tokens. 

Runes Marketplaces 
Runes marketplaces are platforms where users can buy and sell runes with their Xverse wallets once the protocol launches.
However, investors can currently trade pre-rune tokens like Runestone, RSIC, Rune Pups, and RuneX: Unnamed on Magic Eden. 

Runes Launchpads
Runes launchpads are websites where projects can launch and drop their tokens. Both Magic Eden and BitX have launchpads that offer marketing support to projects. However, Runes token projects can also launch on Meta Runes, CraftRunes, and Runes Terminal. 
The Meta Runes and CraftRunes launchpads are currently accepting project applications, while the Runes Terminal launchpad hasn’t yet been rolled out. 

Runes Lending Platforms
Runes lending platforms are decentralized applications (dApps) that enable users to lend and borrow runes directly with their Xverse wallets. 

Runes vs. BRC-20 Tokens: Similarities and Differences
Here is how Runes compare to BRC-20 tokens.

The Runes protocol improves the Ordinals-based BRC-20 token standard by adopting Bitcoin's UTXO model. This allows it to operate within Bitcoin Layer 1, or the base blockchain, and reduce the production of unnecessary UTXOs. Therefore, Runes has a minimal on-chain footprint and improves overall efficiency. 
On the contrary, BRC-20 is based on Ordinal Theory, which is not native to Bitcoin. The protocol’s token issuance approach also leads to UTXO proliferation and network congestion. 
Benefits And Challenges of Runes
Let’s take a look at the benefits and challenges of Runes.
Benefits
Minimizes on-chain footprint thanks to the UTXO-based modelSimplifies the issuance of native fungible tokens on BitcoinIts simplicity could promote innovation in the Bitcoin ecosystemDoesn’t require off-chain data to operateAllows open minting within terms set by the etcher
Challenges
Competition from the widely accepted BRC-20 token standardToken burns triggered by errors can adversely affect user experienceYet to establish itself as a viable Bitcoin token standard 
The Rise of Fungible Tokens on Bitcoin
The rise of fungible tokens on Bitcoin has advanced significantly in 2023 since the launch of the Ordinals protocol, which ushered in the concept of numbering satoshis (sats) in the order in which they are mined. 
CREDIT FOR THIS ARTICLE: XVERSE WEBSITE

Thanks for reading, following and supporting me guys! Cheers and have a great weekend! The article is too long for a weekend reading haha 😂🚀🚀🚀 But understanding Bitcoin RUNES will be a game changer soon!
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