💸🧵 Thread on Bitcoin Runes 🟧:
What Are Bitcoin Runes?
Bitcoin Runes is a protocol designed to create fungible tokens on the Bitcoin blockchain. It leverages Bitcoin’s UTXO (Unspent Transaction Output) model, where each transaction output acts as a discrete unit of digital currency. This innovation allows for the seamless integration of token creation within the Bitcoin ecosystem.
How It Works:
Runes function by etching tokens directly onto the Bitcoin blockchain. This process involves creating a unique identifier and associated parameters for each token, similar to how tokens are created on other blockchains.
Creating a Rune Token:
The creation of a new Rune token is called Etching. During this process, the following details are specified:
- Name: The name of the token.
- Symbol: The abbreviated symbol for the token.
- ID: A unique identifier for the token.
- Supply Amount: The total number of tokens that will be created.
- Divisibility: The number of decimal places the token can be divided into.
- Other Parameters: Additional settings that define the token’s characteristics.
Minting Runes:
Once a Rune is etched, it can be minted. Minting can be of two types:
- Open Mints: Anyone can mint new Runes, allowing for broad participation.
- Closed Mints: Minting occurs under specific conditions, controlled by predetermined rules or agreements.
Why It Matters:
Runes make it easier and more efficient to trade tokens on the Bitcoin blockchain. By simplifying the token creation process, Bitcoin Runes bridge the gap between Bitcoin’s foundational technology and modern token standards.
Don't Fade Runes 🟧
Runes represent a significant innovation in token creation on Bitcoin. Their ability to integrate seamlessly with Bitcoin’s UTXO model makes them a noteworthy development in the blockchain space. As the protocol evolves, it has the potential to drive more diverse applications and innovations within the Bitcoin ecosystem.
