Franklin Templeton, an asset manager, recently published a report in which he predicts that the forthcoming “Runes” token standard will allow Bitcoin, the leading cryptocurrency network, to compete with its counterparts in the alternative finance space. With this new development, the playing field is anticipated to be leveled, and Bitcoin’s position in the market will be strengthened.
The Magic of Runes
At the same time that the Bitcoin halving event was taking place, the company published a fact sheet on Twitter that contained additional information about the forthcoming technology.
According to Franklin, “Runes presents a fresh token standard on Bitcoin layer 1, enhancing the existing fungible token standards on Bitcoin (BRC-20s).”
Runes – A Revolutionary Token Standard for Bitcoin
— Franklin Templeton Digital Assets
On the blockchain, tokens are assets that differentiate themselves from the native currency of that particular blockchain. For example, on Bitcoin, tokens are referred to as BTC, and on Ethereum, tokens are referred to as ETH. Prior to 2023, it was not possible to generate tokens on Bitcoin’s primary blockchain, which prevented it from accessing a variety of applications located on alternative chains. These applications included NFTs, stablecoins, and decentralized finance.
The emergence of Ordinals, which was the result of the brilliant mind of Casey Rordamor, brought about a change in the situation that occurred at the beginning of the year 2023. The protocol makes it possible for users to engrave individual satoshis with unique identification numbers and to imbue them with any information that they desire, which makes the creation of non-fungible tokens (NFTs) easier.
Top 5 Cryptocurrencies Today:
| Name | Price | 24H (%) |
|---|---|---|
Bitcoin
(BTC)
| $29,078.00
| -3.19% |
Ethereum
(ETH)
| $1,948.11
| -4.71% |
Tether
(USDT)
| $1.00
| -0.03% |
BNB
(BNB)
| $295.60
| -1.51% |
Cardano
(ADA)
| $0.51
| -10.30% |
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Bitcoin non-fungible tokens differentiated themselves from Ethereum and Solana non-fungible tokens by incorporating their image data directly into Bitcoin’s blockchain rather than relying on a centralized server for the data.
What Is the Potential Size of Runes?
When compared to other blockchains, the non-fungible token (NFT) market that Bitcoin currently possesses is reportedly more extensive because of Bitcoin. It has managed to surpass Ethereum’s trading volume of $296 million over the past thirty days, recording a staggering $462 million in NFT trading volume.
Domo, a different developer, increased the capabilities of the Ordinals protocol so that it could accommodate the utilization of BRC-20 tokens. On the other hand, the creator of these tokens admitted in a public statement that significant inefficiencies plagued them.
Runes, once again crafted by Rordamor, have been improved to offer greater efficiency. As a result, a smaller amount of information based on the blockchain is required to be transmitted compared to BRC-20 tokens or even Ethereum’s ERC-20 tokens. Runes offer a number of additional benefits, including the fact that they are easily integrated with the lightning network and that they provide a higher level of confidentiality concerning transactions.
Franklin said in his statement, “Bitcoin has a strong potential to bridge the difference in its interchangeable market value compared to other blockchain platforms.”
At the moment, it is estimated that the market capitalization of Bitcoin is $1.2 trillion, whereas the capitalization of its fungible tokens is only $600 million. In comparison, the market capitalization of Ethereum is currently at $378 billion, while the value of its fungible tokens is presently at $499 billion.
“The report concluded with anticipation, eager to witness the potential impact of Runes on Bitcoin’s Fungible token and DeFi market, similar to the transformative effect Ordinals had on Bitcoin’s Non-fungible token market.”
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