Sokipiriye Dokubo
As the Bitcoin halving draws near and the Runes fungible token standard debuts, collectors in the blockchain space may wonder about the implications for Ordinals inscriptions and BRC-20 tokens. Unlike Ethereum’s “merge” transition in late 2022, there’s no immediate concern about the fate of on-chain Bitcoin assets post-halving. The halving simply refers to the reduction in mining rewards every four years, which decreases the supply of new BTC, potentially leading to a price surge.
Bitcoin will continue producing blocks as usual, meaning Ordinals inscriptions and BRC-20 tokens will remain in wallets without any action required. However, the real question revolves around the demand for Bitcoin-related assets and how the launch of the Runes token protocol will affect interest in BRC-20 tokens.
Recently, there has been a surge in demand for Ordinals, with NFT trading volume surpassing that of Ethereum. This shift has propelled cross-chain marketplace Magic Eden to the forefront, and Ordinals collections promising Runes token drops to holders are experiencing significant growth.
Will this momentum wane after the halving? It’s uncertain, but some experts anticipate that Ordinals and other Bitcoin-based assets will benefit from expected BTC price increases in the long run.
Regarding BRC-20 tokens, there has been a decrease in demand for some prominent Bitcoin tokens like ORDI and SATS, which have seen larger declines than Bitcoin itself in recent weeks. The Runes protocol, developed by Casey Rodarmor, the creator of the Ordinals protocol, offers a more efficient implementation of Bitcoin-based tokens.
Runes, having Rodarmor’s endorsement, may attract collectors and investors due to its association with the successful Ordinals protocol. However, its launch could disrupt the economics of Bitcoin and create new assets on the chain, impacting fees and asset prices.
The increased cost of deploying new Ordinals projects on Bitcoin may induce scarcity among existing collections, potentially driving up their prices. Additionally, the Runes protocol incorporates visual components with every Rune, further utilizing the Ordinals protocol.
As fees rise and asset prices potentially increase, Bitcoin assets may become more exclusive, limiting access to certain individuals. However, alternative chains and Bitcoin layer-2 scaling networks offer cheaper alternatives. Nonetheless, this shift could elevate Bitcoin into a more exclusive category.
While some speculate that Runes will thrive initially, others argue that sustained mass adoption may be challenging due to Bitcoin’s high transaction fees. Ultimately, the success of Bitcoin-based applications depends on their ability to maintain volume and momentum despite these challenges.