April 28, 2024
Runes Protocol Dominates Bitcoin Transactions Since the Halving
Bitcoin Halving

Runes Protocol Dominates Bitcoin Transactions Since the Halving

Runes, a protocol utilizing the Bitcoin network, has surged to represent a significant portion of Bitcoin transactions since the halving. While it initially provided hope for struggling miners, questions arise as its impact fluctuates post-halving.

Runes Protocol Overview

Similar to BRC-20s, Runes operates within the Bitcoin network, paying fees in Bitcoin to generate new tokens. However, it utilizes the Unspent Transaction Output (UTXO) model to create new tokens on Bitcoin, contrasting with Ordinals’ account model.

High Transaction Volume

Since its launch on April 20th, Runes has processed over 2.38 million transactions, making up 68% of all Bitcoin transactions. Notably, on April 23rd, Runes experienced its peak transaction volume, only to see a significant drop the following day.

Impact on Miner Fees

Runes contributed over $2.4 million in miner fees on halving day, accounting for more than 70% of total fees. Initially hailed as a potential savior for struggling miners, its effectiveness in offsetting the halving’s impact is now questioned.

Community Divisions

Community members remain divided on Runes’ ability to provide a sustainable revenue stream for miners. Daily total fees post-halving have fluctuated, casting doubt on its long-term viability.

Miners’ Position Index

Despite concerns, data from CryptoQuant shows no substantial movement in Miner’s Bitcoin holdings post-halving. The Miners’ Position Index (MPI) indicates no clear intent for a sell-off.

Uncertain Future

As Runes’ impact wanes and initial hype fades, its sustainability as a revenue stream for miners remains uncertain. However, other groundbreaking developments offer potential alternative revenue sources to mitigate the halving’s effects.

Conclusion

While Runes initially showed promise in alleviating the challenges posed by the halving, its long-term effectiveness remains uncertain. As the landscape evolves, miners seek sustainable solutions to navigate the changing dynamics of the Bitcoin ecosystem.

Image by Sketchepedia on Freepik

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