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Altcoin Protocol Runes Clogs Bitcoin: What This Means

2 mins
Updated by Bary Rahma
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In Brief

  • Bitcoin's halving and the launch of the Runes protocol coincided, impacting the crypto market.
  • Runes allows the creation of meme coins on the Bitcoin blockchain, leading to network congestion.
  • Despite causing network strain, proponents argue Runes enhances miner rewards and security.
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Bitcoin’s much-anticipated halving unfolded on April 20, drawing significant attention and praise from the crypto market.

However, the spotlight was shared with the debut of the Runes protocol, which stirred controversy by congesting the network with high fees and meme coins.

Runes Make Bitcoin Network Congestion Worse

Runes ignited fervor within the crypto community, presenting itself as a means to infuse the meme coins into the Bitcoin blockchain. This protocol diverges from the BRC-20 token standard by leveraging an Unspent Transaction Output (UTXO) model. It allows the creation of altcoins through an “etching” process directly on the network.

Casey Rodarmor, the protocol’s creator, described Runes as designed for degens and meme coins while emphasizing its simplicity, efficiency, and security.

“It is a legitimate competitor to Taproot Assets and RGB. The protocol is self-contained and has no dependencies on ordinals or inscriptions, making it extremely simple… I’m highly skeptical of “serious” tokens, but runes is without a doubt a “serious” token protocol,” Rodarmor added.

Runes’ introduction prompted a surge in Bitcoin network activity, resulting in congestion and heightened fees. Indeed, a minimum transaction fee now exceeds 840 sat/vB, equivalent to approximately $76. It also bolstered block revenue, averaging 21.74 BTC per block post-halving.

Bitcoin Transaction Fees
Bitcoin Transaction Fees. Source:

Jameson Lopp, the co-founder of Casa, pointed out that these high fees have allowed Bitcoin miners to surpass their all-time high daily transaction fees of $24 million. Miners have collected 860.20 BTC, approximately $54 million in transaction fees alone, within the first 60 blocks of the post-halving.

Read more: Bitcoin Halving History: Everything You Need To Know

Runes proponents see this spike in network activity as positive as it increases miners’ rewards, which the halving had reduced.

“In the last 5 BTC blocks, the fees have surpassed the Coinbase reward! The Runes degens have single-handedly offset the drop in miner rewards from the halving. Runes are drastically increasing Bitcoin’s security budget,” Leonidas explained.

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Oluwapelumi Adejumo
Oluwapelumi believes Bitcoin and blockchain technology have the potential to change the world for the better. He is an avid reader and began writing about crypto in 2020.