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Author: Admin | 2025-04-28
Support complex smart contracts, which limits its use cases beyond simple transactions. Non-fungibility: Bitcoin was designed for fungible tokens, meaning each Bitcoin (BTC) is identical to another. This makes it challenging to create and manage NFTs, which require unique identifiers. Scalability issues: The Bitcoin network can become congested, leading to slower transaction times and higher fees, which can be problematic for applications requiring quick and cheap transactions.Indeed, while Ordinals aimed to address these limitations, Runes seeks to provide a more efficient and comprehensive successor. What are Bitcoin Runes?Bitcoin Runes operates by embedding extra data into BTC transactions. This additional data contains information that uniquely identifies each token or digital asset, making them distinct from regular Bitcoin transactions. This mechanism allows for the creation of NFTs and other unique digital assets on the Bitcoin blockchain, often regarded as securer and more decentralized than other blockchains that natively support NFTs, such as Ethereum.Suppose an artist, Alice, wants to create a unique digital artwork and issue it as a Bitcoin Rune. She follows these steps: Encoding the artwork: Alice’s digital artwork is encoded into a format that can be embedded into a Bitcoin transaction. This process involves creating a metadata file that includes the artwork’s details, such as its name, description and a link to the digital file. Creating the transaction: Alice initiates a Bitcoin transaction where a small amount of BTC is transferred. Alongside this transfer, the metadata for the artwork is embedded into the transaction using a specific encoding scheme. Broadcasting the transaction: The transaction is broadcast to the Bitcoin network and confirmed in a block, permanently recording the unique artwork on the Bitcoin blockchain. The resulting Bitcoin Rune represents ownership of the digital artwork.Naturally, the inclusion of artwork in the metadata of a transaction means that those specific satoshis can be sold at a much higher price, allowing the artist to profit. By embedding the unique digital artwork into the Bitcoin transaction, these satoshis become part of an NFT or a unique digital asset, increasing their value beyond the standard market price of Bitcoin.Did you know? Runes are designed to be lightweight, using minimal additional data in Bitcoin transactions, which helps preserve Bitcoin’s efficiency and block space.Runes vs. OrdinalsEach year, Apple brings out a new phone, or the Call of Duty franchise releases a new game, and we can’t help but feel conned into buying a new version of something
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