Among the many factors shaping and directing the evolution of Bitcoin, inscriptions have taken center stage as the most popular, creative, and controversial trend affecting both Bitcoin’s network and community. Although inscriptions are simply a methodology for attaching metadata such as text, images, and videos to a satoshi — that is, the smallest unit of a bitcoin — their impact on the Bitcoin network and community has been anything but simple. What makes inscriptions powerful is that their attached metadata is stored in the witness data of a Bitcoin network transaction, which is published directly to the Bitcoin blockchain. As a result, inscriptions are singular digital assets that can be traded and collected as verifiably unique Non-Fungible Tokens (NFTs) that are secured by Bitcoin.
Many predicted that surging transaction volume and fees would play significant roles challenging Bitcoin’s plight to become a globally recognised currency. Few, however, would have expected that such a magnitude of transaction volume would arise from inscriptions, rather than standard bitcoin transfers. With inscriptions taking on three prominent forms — Ordinals, BRC20 tokens, and Runes — in 2024, savvy members of the Bitcoin and broader Web3 communities have taken to understanding these Bitcoin-native digital assets and what their roles might be in shaping the network’s future.
Ordinals: The Origins of Inscriptions
Developed by Casey Rodarmor in January 2023, Ordinals were the first metadata inscriptions on Bitcoin. The Ordinals protocol leverages Bitcoin’s Taproot and SegWit upgrades to expand the network’s utility without altering its core code. By virtue of being native to the Bitcoin blockchain, the Ordinals protocol facilitates the direct issuance and exchange of NFTs that live on Bitcoin’s base chain, and therefore benefit from its unrivaled immutability, decentralisation, and security.
Bitcoin Ordinals have opened up a range of new use cases for the Bitcoin network, from digital art to supply chain transparency — and all without altering a single line of code. However, Ordinals have also been responsible for a significant uptick in transaction volume, causing fees to spike at irregular intervals and congesting the chain for users attempting to process standard bitcoin transfers.
The Rise of Runes
As the attention and controversy surrounding Ordinals and their demands on the Bitcoin network reached fever pitch, Rodarmor went back to the drawing board and delivered a different, more efficient product to the Bitcoin community in September 2023. Going by the moniker Runes, Rodarmor’s newest development is a fungible token standard aimed at reducing the blockchain bloat caused by BRC20 tokens.
Unlike Ordinals, which are unique and non-fungible, Runes are interchangeable tokens that can be traded on a one-to-one basis. Like BRC20 tokens, Runes facilitate the creation of memecoins, utility tokens, and other digital assets tailored to specific applications and use cases.
In addition to complementing Ordinals, Runes were designed to address a critical issue plaguing the BRC20 protocol: the creation of surplus Unspent Transaction Outputs (UTXOs) rightly referred to as “junk”. These junk remnants were notorious for clogging the Bitcoin network, regularly hindering efficiency and user experience. By employing a UTXO-based protocol that leverages Bitcoin’s native features for on-chain data storage, Runes minimise the generation of superfluous UTXOs and offer the Bitcoin community an alternative model for fungible token generation and exchange.
Moreover, Runes come equipped with Lightning Network compatibility, which shifts transactions off-chain to bypass the typical delays and high fees associated with the Bitcoin network. By leveraging the Lightning Network, Runes transactions can be executed swiftly and cost-effectively.
Runes, Ordinals, BRC20s, and Bitcoin: The Bigger Picture
While Runes have already risen to popularity within the Bitcoin community as fungible BRC20 competitors with Lightning Network compatibility, they do not purport to solve Bitcoin’s scalability challenges. If anything, Runes are yet another instantiation of and contributor to increasing demand for innovation and new use cases for the Bitcoin blockchain, whose transaction throughput remains limited.
Altogether, Runes and their predecessors Ordinals and BRC20s continue to act as sources of rising transaction volume and fees — albeit to the appreciation and enjoyment of much of the Bitcoin community. While the trio of new trends also serve miners as substantial new revenue sources, Bitcoin’s future hinges on its usability for the average user, who is easily deterred by steep and unstable transaction fees.
In order to balance the demand for innovation, decentralised applications, and emergent digital assets on the Bitcoin network with demand for a reliable and low-cost user experience, the development and implementation of a cogent, high-performance scaling solution is of the utmost importance.
To the team of industry experts and innovators at zkBTC, Runes, Ordinals, and BRC20 tokens are merely tip of the iceberg. zkBTC anticipates a fast-approaching wave of exponential growth and innovation on Bitcoin that will make current demands on the network appear mild and modest.
Now is the time to lay the foundation for a high-performance, zero-knowledge-powered scalability stack that supports smart contracts and a full array of cutting-edge EVM-based innovation.
It’s time to get ahead of the curve and prepare for the next big wave of Bitcoin development — join the zkBTC team on the mission to support Bitcoin’s next move up.
zkBTC invites you to join the Bitcoin scalability mission to reunite the Bitcoin community, ensure optimal accessibility and affordability for network transactions, and satisfy all demand for Bitcoin and rising Bitcoin-native use cases.
