Since the launch of the Ordinals protocol in January 2023, the Bitcoin ecosystem has entered a new narrative chapter. The BRC20 protocol based on Ordinals quickly became popular, not only popularizing the concept of inscriptions, but also spawning ARC20, Stamps, and a series of other innovations, making people start to pay attention to the development and possibilities of the Bitcoin ecosystem again.

With the continuous emergence of various protocols and application attempts in the Bitcoin ecosystem, a new asset issuance protocol, Runes, has recently been launched and has quickly attracted widespread attention from the market. As another masterpiece of Casey, the creator of the Ordinals protocol, will Runes replace BRC20? Here is a brief summary of my personal opinion.

First of all, we need to understand what Ordinals, BRC20 and Runes are:

  • Ordinals

Ordinals were first proposed by its founder Casey Rodarmor at the end of 2012. It is a system for numbering the smallest unit of BTC, sats. By assigning a unique ordinal identity to the smallest unit of Bitcoin, sats, and attaching additional data (images, videos, text, etc.) to the sats, each sats is unique, thus having the properties of an NFT. The process of attaching data is called inscribe, and the implanted data is called inscription. Whether it is an inscription in the form of a token, or other inscriptions in the form of text, pictures, audio, and video, it can be called a Bitcoin inscription.

  • BRC20

BRC20 is based on Ordinals' asset issuance protocol, which specifies the token name, total token amount, and number of tokens minted per inscription in a specific data specification format; the deployment, minting, and transfer of tokens are achieved by writing these data into Satoshi.

  • Runes

After Casey Rodarmor released the Ordinals solution, he rebuilt the asset issuance protocol. Casey designed this protocol to reduce the burden that BRC20 brings to Bitcoin nodes, and Casey also claimed that the Runes protocol is better and simpler than the experimental BRC-20.

After briefly introducing the basic concepts, the following article will put aside the technical details and only explain why I am more optimistic about BRC20 inscriptions from the dimensions of decentralization, fair issuance, community consensus, etc.

Bitcoin has set the standard of decentralization, fairness and openness since its inception. Satoshi Nakamoto's original intention in creating Bitcoin was to build a peer-to-peer electronic currency system that does not require the supervision of a centralized institution and in which everyone can participate equally. This concept not only shaped Bitcoin, but also became the spiritual pillar of the entire cryptocurrency field. The BRC20 protocol is precisely the faithful successor of this spirit.

The biggest feature of the BRC20 protocol is its fair issuance mechanism. Here, there is no pre-mining, no institutional quota, no team reservation, and everyone is on the same starting line. Whether it is ordinary retail investors or project parties, they must pay the same gas fee to participate in the casting. If the dealer wants to dominate a BRC20 project, he must invest a lot of time and money to collect chips. This mechanism effectively prevents market manipulation and monopoly and ensures the fairness of asset issuance.

Runes, on the other hand, tends to give project owners more control. Rune deployers can set restrictions on rune casting addresses and reserve a certain casting share for themselves. This makes the distribution and value of tokens largely depend on the project owner's pattern and ethics.

Therefore, from the perspective of decentralization and fair issuance, BRC20 is closer to the original concept of Bitcoin established by Satoshi Nakamoto. It is this design concept of equality for all that has quickly attracted a large number of supporters to BRC20.

Community drive is a key factor in the rise of BRC20. Whether a project can gain widespread support from the community directly determines whether it can form enough consensus to release the power of endogenous growth. Since the launch of BRC20, although most projects are still at the Meme concept level, it is the extensive community support and promotion that has spawned countless myths of getting rich quickly, fully demonstrating the value of the power of community consensus.

Whether it is the well-known ORDI, Sats, Rats in the early days, or the BRC20 inscription token that has been in the limelight recently, they have all achieved breakthrough development by virtue of spontaneous community publicity and participation. These communities are all built from the bottom up, not controlled by any single force, truly embodying the concept of decentralization and following the autonomous will of the community.

Among many community-driven inscriptions, Piin is undoubtedly an outstanding representative that embodies the appeal of the BRC20 protocol community. Piin is deployed by the Pi community, which has 55 million miner users. The purpose is to use the form of inscriptions to release the powerful consensus energy of the Pi community and unite users from all circles to launch a grassroots social practice movement. With such a strong user base, Piin has attracted widespread attention from both inside and outside the community since its launch. Today, more than 30,000 global users have joined the Piin community, with more than 15,000 currency addresses, and the total transaction volume is also among the top inscriptions, which shows that it has begun to bear fruit as a community-led grassroots movement.

In terms of community building, Piin's community members not only come from all over the world, but also span multiple circles, reflecting a high degree of inclusiveness. Driven by its self-organized volunteer groups, Piin was able to spread through various channels and attract newcomers to join, creating an active and diverse community ecology. This meme, born from grassroots power, contains unique value propositions and development visions, and also confirms the BRC20 protocol's ability to carry community consensus and stimulate the powerful potential of grassroots power.

For a project like Piin that is rooted in the grassroots and has a unique development vision, BRC20 provides the most suitable track for it, allowing it to maximize its endogenous growth momentum. Therefore, although the future direction of tracks such as BRC20 is unpredictable, it is certain that winning the community means winning everything. This is exactly why Meme is so popular - they come from the true love of users and gradually rise from the grassroots community.

The core of meme is virality, and simplicity, directness and fun are the key to virality. The 4-character asset name of BRC20 has a unique advantage in this regard.

The deployment of Runes asset names is restricted. The launch indicates that only asset names of 13 to 26 characters can be deployed. Asset names of 12 characters or less will be gradually unlocked. The unlocking is set to be after every 17,500 blocks (about 120 days, or 4 months) before a shorter name can be deployed. Therefore, if you want to mint a 4-character token, you need to wait 3 years. Currently, Runes have long names of more than a dozen characters, such as "UNCOMMON•GOODS", "Z•Z•Z•Z•Z•FEHU•Z•Z•Z•Z•Z", which is obscure and difficult for the Chinese community who are not good at English to understand and difficult to form a viral spread.

Image: Runes

In contrast, the 4-character inscription name of BRC20 is not only concise and easy to remember, but has also been deployed first, which gives it a first-mover advantage. Imagine that names like "Ordi" and "Rats" are easy to spread and can be remembered by the public once they hear them, but it is probably difficult to achieve the same effect with lengthy rune names.

Image: BRC20 inscription

Meme-like names are not only easy to remember and share, but can also trigger emotional connections, thereby triggering explosive dissemination on social networks.

It can be said that the uniqueness of the BRC20 inscription in the name design has greatly promoted its viral effect. This bottom-up meme dissemination advantage is the key to BRC20's ability to quickly attract attention and gather popularity.

On the other hand, Runes has many restrictions on its name, which undoubtedly become an insurmountable natural obstacle. The lengthy name is not only difficult to remember and spread, but also difficult to resonate and discuss in the community. This disadvantage will undoubtedly affect its promotion effect in the Chinese area.

Therefore, from the perspective of Meme propagation, BRC20 inscriptions undoubtedly have a first-mover advantage. The concise and easy-to-remember 4-character name, as well as the Meme attribute derived from it, enables it to spread quickly in the community, attracting more users' attention and participation. This viral spread ability will be a great weapon for BRC20 in future ecological competition.

As the earliest asset issuance protocol in the Bitcoin ecosystem, BRC20 has achieved a clear first-mover advantage in ecosystem construction. As mentioned above, BRC20 has formed a thriving project community, with star projects such as Sats and Rats emerging. This network effect has laid a solid foundation for the further development of BRC20.

At the same time, BRC20 still has huge room for upgrading in terms of technology. The latest update not only supports 5-character asset names, but also supports "self-issuance", that is, the project party deploys and completes it by itself, and also supports the burning mechanism. In the short term, these updates of BRC-20 are more conducive to hype than Runes. On the one hand, it facilitates the centralized issuance of project parties, and has competitiveness with Runes at this level. It also enables old project parties to come up with some deflationary gameplay to stimulate market performance. It can be foreseen that these innovations will activate more gameplay and inject new growth momentum into BRC20.

Admittedly, Runes has made some useful attempts in technology (although today’s sharing does not involve this aspect, interested friends can search for related articles on their own), and has attracted too much attention from the market recently, causing the BRC20 market to temporarily stall, but these optimizations are still difficult to shake BRC20’s leading position.

The current crypto market is in a state of constant exploration and development, with various new ideas and models constantly emerging, and most of them have not yet formed a clear collective consensus. In this context, each protocol is trying to shape its own narrative to attract users and developers who agree with its ideas. This situation of letting a hundred flowers bloom and a hundred schools of thought contend is not a bad thing for the entire industry. Only through full exploration and competition can a new consensus be finally formed and the industry can be pushed towards maturity.

To quote Twitter user CM, "What we can do is to find the track that suits us at this stage, not to dream of making all the money in the market, and then save enough money to welcome the next super narrative of collective consensus."

At this point in time, the reason why I am more optimistic about BRC20 is that it is this protocol that is rooted in the principle of decentralization and adheres to fair issuance that can gain the long-term support and trust of the community. This is also the core competitiveness of BRC20 and the fundamental reason why it is difficult to be surpassed.