The Runes protocol will ignite a new season for Bitcoin after the halving

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the initiation of the Runes protocol hunt for the first satoshi in the halving block. This concurrent event could potentially hold even greater historical significance for Bitcoin (BTC).

The second phase of Bitcoin

In December 2022, the Ordinals protocol was introduced, marking a groundbreaking cultural shift on the world’s biggest blockchain. This development is frequently called “Bitcoin’s second phase.” Through Ordinals, users gained the ability to add various types of content like images, audio, and code files directly onto the Bitcoin blockchain.

Following the triumphant rollout, developer Casey Rodarmor proposed the idea of Runes – a token protocol aimed at making it simpler to generate interchangeable tokens on the Bitcoin platform.

When the rune token protocol is triggered by the halving event, a contest ensues for control of block space. Competitors will strive to create the initial tokens and most appealing names. Following this, there will be a race to acquire these newly minted tokens.

BREAKING: The Largest Bitcoin Mining Company by Hashrate is now an Ordinals Company

They will be isolating the Epic Sat at the halving if they win the block and distributing profits to pool members

The real question: Will they re-org to win & Pre-Etch the first 1,000 Runes?

— trevor.btc (@TO) April 17, 2024

International exchanges are gearing up to debut the primary tokens set to be introduced through the Runes protocol. Notable marketplaces and decentralized exchanges (DEXs), including Magic Eden and OKX, have publicly declared their intent to facilitate trading of tokens born from the Runes protocol since its inception.

The historical significance of the Runes and Ordinals protocols 

Instead of platforms like Ethereum (ETH) and Solana (SOL), which are recognized for their role in creating applications and facilitating the trading of other assets, Bitcoin has traditionally been viewed as a standalone asset without any specific function.

Over the past year, following Ordinals’ launch, an unprecedented number of people, totaling in the thousands, have made their daily entries into the Bitcoin network to purchase assets denominated in Bitcoin. To date, over $3 billion worth of transactions have been executed through these Ordinals assets, impacting approximately 600,000 distinct wallets and generating around 2.5 million on-chain transactions.

Franklin Templeton, a leading asset manager with approximately $1.5 trillion under management, is observing ordinals as the catalyst for a revival in Bitcoin’s technological advancements.

— Lugui Tillier (@lugui_tillier) April 13, 2024

The Ordinals protocol has significantly influenced Bitcoin in a manner not observed for some time, prompting the market to label this stage as Bitcoin’s “second era.” This phase is marked by a renewed surge of inventive activity surrounding the world’s foremost blockchain.

It’s amazing to see how quickly the Bitcoin L2 ecosystem is developing, despite requiring a significant amount of effort before it reaches maturity.

— Mustafa Al-Bassam (@musalbas) April 16, 2024

Due to the growing fascination with Bitcoin’s potential for navigation and development, various tools such as wallets, nodes, UTXO managers, and even the mempool have seen significant enhancements. Debates surrounding decentralized finance (DeFi) and Bitcoin’s layer-2 solutions have gained immense traction, capturing the interest of venture capitalists like never before.

The Ordinals protocol sparked a fresh interest in Bitcoin, while the Runes protocol signifies the subsequent development phase.

Who’s going to win the $1 million satoshi? 

The block that gets halved on its own will likely be the most disputed and profitable one ever mined. Not only will retailers fight for securing space in this block, but miners will also engage in intense competition. The miner who successfully mines this block will reap a reward of “Epic” satoshis, valued at over $1 million.

BREAKING: The Largest Bitcoin Mining Company by Hashrate is now an Ordinals Company

They will be isolating the Epic Sat at the halving if they win the block and distributing profits to pool members

The real question: Will they re-org to win & Pre-Etch the first 1,000 Runes?

— trevor.btc (@TO) April 17, 2024

Moreover, in preparation for potential Bitcoin network overload, some initiatives are devising strategies to enhance Bitcoin trading through the Runes protocol. Previously, a bridge connecting Bitcoin assets on Solana proved effective. Currently, projects more synced with Bitcoin are surfacing, including RuneChain – a Bitcoin layer-2 specifically designed for the Runes platform.

People are increasingly knowledgeable about Bitcoin as they anticipate the introduction of the initial tokens using the Runes protocol. Additionally, a large number of individuals have begun operating Bitcoin nodes and are learning about UTXOs in order to maximize their benefits during these token events.

NFT communities such as the Pizza Ninjas are taking great strides to instruct their members on relevant themes. They’ve developed a comprehensive survival guide specifically for Runes, and provide round-the-clock support desks in both English and Chinese.

The Runes protocol will ignite a new season for Bitcoin after the halving

In addition, the market is currently undergoing a “pre-Rune era,” during which some Rune-linked tokens have already been given out as airdrops to Bitcoin NFT (Non-Fungible Token) owners. The specific distribution methods for each collection vary: Some are taking snapshots of NFT holders and will distribute tokens following the halving, while others will distribute based on how long users have held their NFTs (with longer ownership resulting in more tokens received).

Runestone is an example of an NFT collection that will conduct a one-time snapshot. RSIC is an example of a collection that will distribute tokens based on the length of time an NFT has been held.

An alternate approach for users looking to take advantage of the current trend is by acquiring BRC-20 tokens, such as WZRD and PUPS, which can later be transferred from the BRC-20 protocol to the Runes standard.

The following table categorizes ongoing projects, marketplaces, and launchpads with upcoming launches pertaining to the pre-Runes realm.

The Runes protocol will ignite a new season for Bitcoin after the halving

The next phase for Bitcoin is rapidly approaching, bringing us to a pivotal moment. Rune tokens may elicit strong emotions – love, hate, transformation, fear, necessity, exhaustion, and more – all at once. Regardless of the reactions, these events will unfold, leaving no room for prevention. So buckle up for season two’s thrilling ride!

Lugui Tillier is a guest author for CryptoMoon and the business development director of Lumx, a Web3 studio in Rio de Janeiro that counts BTG Pactual Bank, the largest investment bank in Latin America, among its investors.

The following article is meant to provide you with some background information. However, it shouldn’t be construed as legal or financial guidance. Any perspectives shared in this piece are solely those of the author and may not align with CryptoMoon’s viewpoints.

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2024-04-19 00:48