The 2024 halving is an event of great significance in the world of cryptocurrencies. However, this year, the Runes protocol and the search for the epic satoshi, the first satoshi of the halving block, will begin on the same day. This could potentially be an even more momentous occasion in the history of Bitcoin (BTC).
The launch of the Ordinals protocol in December 2022 marked the second phase of Bitcoin and brought about a cultural movement unlike anything seen before on the largest blockchain in the world. It has been referred to as “The second phase of Bitcoin.” With Ordinals, users were able to store various types of files, such as images, audio, and code, on the Bitcoin blockchain.
Following the successful launch of Ordinals, developer Casey Rodarmor introduced the concept of the Runes token protocol. This protocol is designed to facilitate the creation of fungible tokens on the Bitcoin network.
When the halving occurs, the Runes token protocol will be activated, leading to a battle for block space. Players will compete with each other to be the first to issue tokens and come up with the best token names. There will also be a race to be the first to purchase these tokens.
Exchanges around the world are already preparing to list the main tokens that will be launched with the Runes protocol. Marketplaces and decentralized exchanges (DEXes), such as Magic Eden and OKX, have announced their support for tokens created through the Runes protocol from day one.
The introduction of the Ordinals and Runes protocols has had a significant historical impact on Bitcoin. Unlike Ethereum (ETH) and Solana (SOL), which are known for their development platforms and asset issuance and exchange capabilities, Bitcoin has traditionally been seen as a purposeless asset. However, since the launch of Ordinals, thousands of people have been utilizing the Bitcoin network every day to acquire assets priced in Bitcoin. Over $3 billion has already been transacted through these Ordinals assets in just over a year, involving nearly 600,000 unique wallets and 2.5 million on-chain transactions.
The advent of Ordinals has sparked a cultural renaissance in Bitcoin, leading to an accelerated wave of innovation on the world’s largest blockchain. This period has been dubbed “the second phase of Bitcoin.”
With the renewed interest in Bitcoin navigation and development, various products, such as wallets, nodes, unspent transaction output (UTXO) managers, and even the mempool, have seen improvements. Discussions around decentralized finance (DeFi) and Bitcoin’s layer-2 solutions have also intensified, capturing the attention of venture capitalists.
The Runes protocol represents the next phase in Bitcoin’s evolution, following the impact of the Ordinals protocol. The halving block itself will be highly contested and lucrative. In addition to the competition among retail players for block space, miners will also engage in a duel. The miner who mines the halving block will be rewarded with an “Epic” satoshi, estimated to be worth over $1 million.
To address potential network congestion, some projects are developing solutions to scale trading on the Runes protocol. Previously, a bridge enabling the exchange of Bitcoin assets on Solana proved successful. Now, platforms more aligned with Bitcoin, such as RuneChain, a Bitcoin layer-2 focusing on Runes, are emerging.
As the market prepares for the launch of the first tokens created using the Runes protocol, users are becoming more knowledgeable about Bitcoin. Many are running Bitcoin nodes and educating themselves about UTXOs to gain an advantage during token launches. NFT communities like the Pizza Ninjas have made significant efforts to educate their holders on these topics, providing survival guides and round-the-clock assistance.
The market has also experienced a “pre-Runes season,” with some Runes-standard tokens being distributed through airdrops to Bitcoin NFT holders. Different distribution models are employed, such as snapshots of NFT holders and token distribution based on the duration of NFT ownership.
Users can also capitalize on the trend by purchasing BRC-20 tokens, like WZRD and PUPS, which will migrate from the BRC-20 standard to the Runes standard.
Bitcoin’s second season is approaching a climactic moment with the introduction of Runes tokens. These tokens will be historic, loved, hated, transformative, frightening, necessary, and exhausting all at once. Nothing will stop their arrival. Welcome to season two!
Lugui Tillier is a guest author for Cointelegraph and the business development director of Lumx, a Web3 studio in Rio de Janeiro with BTG Pactual Bank, the largest investment bank in Latin America, among its investors.
This article is for informational purposes only and should not be construed as legal or investment advice. The views expressed here are solely those of the author and do not necessarily represent the views of Cointelegraph.