Bitcoin Gas Fee Surge: Abra Global CEO Explains Why

Bitcoin (BTC) gas fee has seen a progressive surge recently and Abra Global CEO Bill Barhydt believes that it is tied to Runes, a new proposed token standard on Blockchain.

Bitcoin Gas Fee, Runes, and Ordinals Link

The much-anticipated Bitcoin halving event went live earlier today but Casey Rodamor’s latest creation Runes seems to be taking all the attention at the moment. Barhydt highlighted that this token standard is contributing to a massive hike in Bitcoin transaction fees. 

Runes provides an easier and more efficient means for users to create fungible tokens on the Bitcoin blockchain. In other words, the primary role of the token standard is to facilitate the launch of fungible tokens on Bitcoin, per the statement from Barhydt. He further stated that the most common fungible tokens as of today are ERC-20 tokens on Ethereum. 

Runes!

What are Runes, why are they so interesting and why are they causing a huge spike in #bitcoin transaction fees…

Read on….

Runes is a new proposed token standard on Bitcoin that makes it easier and more efficient for users to create fungible tokens on the blockchain.…

— Bill Barhydt (@billbarX) April 20, 2024

While Rodamor is also connected to the release of Ordinals, Runes is quite different from Ordinals which permits the creation of Non-Fungible Tokens (NFTs). Ordinals allow people to “inscribe” data on the smallest units of Bitcoin (i.e. satoshis) to create highly valued assets on Bitcoin. 

Both protocols still share a few similarities including the fact that they both allow people to “etch” and mint tokens on-chain.

Capabilities of Rune Highlighted By Abra CEO

Runes also utilizes small, lightweight transactions known as “edicts”. This feature is usually used to transfer ownership of tokens without impacting the Bitcoin network negatively. In a bid to simplify the creation and management of fungible tokens, Runes leverages Bitcoin’s UTXO model and the OP_RETURN opcode. 

“Each Rune transaction can specify multiple operations across different Runes,” Abra Global CEO stated. “In the event of a token transfer, the Runes protocol will split the UTXO into multiple new UTXOs based on the instructions in the OP_RETURN data.”

Barhydt outlined certain benefits of having Runes in the Bitcoin ecosystem including minimizing on-chain footprint and improving UTXO management. He strongly believes that the token standard will bring about a more simplified approach to creating fungible tokens on the Bitcoin network, especially when compared to the likes of BRC-20, RGB, and Taproot.

Runes users do not need to rely on any off-chain data or native tokens before they can create multiple tokens and manage them easily on-chain.