The realm of Bitcoin is constantly evolving, and one of the hottest trends revolves around Ordinals directly onto the blockchain. Terms like "Ordinals," "BRCs," and "Runestones" might be swirling around, leaving you bewildered. This comprehensive guide delves into these concepts, explaining what they are and why Runestones are making a significant impact in the NFT space.

Understanding the Foundation: Bitcoin Odinals

Before we delve into Runestones, it's crucial to grasp the foundation: Bitcoin Ordinals. Imagine permanent engravings on the smallest unit of Bitcoin, the Satoshi. These Ordinals can hold various data types: text, images, and even audio clips. Essentially, they're NFTs built directly onto the Bitcoin blockchain, offering an unparalleled level of permanence.

Earlier protocols, like BRC-20, emerged to create tokens on the network. However, these protocols had limitations and caused congestion. This paved the way for Runestones to enter the scene.

Runestones: A Glimpse into Their History

The story of Runestones begins in late 2022 with the Runes protocol, the brainchild of 

developer Casey Rodarmor. 

Unlike the official protocol launch, a project called Runestone made a splash recently with a massive airdrop. The Runestone airdrop is spearheaded by Leonidas, a prominent figure in the NFT and Ordinals space. Leonidas is known for his collection of rare Ordinals and his advocacy for technology. 

The Runestone airdrop aimed to reward early adopters of the Ordinals protocol and incentivize further participation in the ecosystem. By rewarding users with Runestones, the project hopes to stimulate the growth of a decentralized marketplace for Ordinals.

Over 112,000 Runestones were distributed to wallets holding Ordinals (Bitcoin NFTs). This generous airdrop not only rewarded early adopters but also thrust Bitcoin NFTs into the limelight.

‍What Are Runes?

The Runes protocol is a token standard designed for issuing fungible tokens directly on Bitcoin. It aims to provide users with a more efficient way to create these tokens. 

BRC-20s have been the standard for Bitcoin tokens, but they have an inherent issue: they create surplus "junk" UTXOs (Unspent Transaction Outputs). 

These UTXOs can clog up the network, hindering a seamless user experience. Bitcoin Runes attempts to address this issue by cleaning up the network and allowing efficient transactions to occur on the network. 

Why Are Runes Required?

Runes elevates the capabilities of Bitcoin Ordinals by introducing advanced functionalities like programmable attributes, royalties, and interoperability with other blockchains. This protocol creates new opportunities for innovation and creativity within the Ordinals ecosystem, empowering creators to craft distinctive and captivating digital assets.

As the adoption of Runes expands, it becomes instrumental in enhancing Bitcoin's capabilities and nurturing a vibrant community of developers and enthusiasts.

Runes vs. Runestones: Decoding the Difference

While Runes and Runestones share a connection, they serve distinct purposes within the Bitcoin Ordinals ecosystem. Here's a breakdown of their key differences:‍

i. Function

• Runes: A token standard designed for issuing fungible tokens directly on the Bitcoin blockchain. Think of them as a new type of "cryptocurrency" native to Bitcoin. They aim to create a more efficient way to create tokens compared to existing methods like BRC-20.
  
• Runestones: NFTs (non-fungible tokens) built on top of the Ordinals protocol. They function as digital collectibles that can hold various data types and historical significance. The initial Runestone airdrop served as a reward for early Ordinals adopters.
  

ii. Stage of Development

• Runes: Still under development. Their official launch is expected after the fourth Bitcoin halving.
  
• Runestones: Already live.
  

iii.  Focus

• Runes: Streamlining transactions and enhancing Bitcoin's versatility for fungible tokens.
  
• Runestones: Commemorating historical moments in Bitcoin and fostering community engagement within the Ordinals ecosystem.

Why Runestones Matter

Runestones stand out from the typical NFT crowd:

• Digital Time Capsules: They hold historical significance, offering a richer experience than just a digital collectible.
• Built for the People: Distributed through a fair airdrop, they reward long-term Bitcoin holders and encourage wider participation.‍
• Market Dominators: These digital time capsules have captivated art lovers and crypto enthusiasts, amassing a massive community.

Runestone by Numbers

Runestone has surpassed leading Ethereum NFT collections like BAYC and Pudgy Penguins and is now over halfway to surpassing CryptoPunks. This milestone indicates that a Bitcoin NFT collection is well on its way to surpassing the top Ethereum NFT collection.

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Moreover, the demand for Runes is increasing daily. According to data from Rune Alpha, over 2,000 Rune tokens have been etched, signifying the creation or minting of these tokens. 

Additionally, there have been a significant 820,815 transactions involving Rune tokens, indicating the active engagement and utility of these tokens within the ecosystem. Lastly, the total fee generated from these transactions amounts to 312.412 BTC (equivalent to more than $19 million), highlighting the economic activity and value exchange facilitated by the Rune tokens.

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Adding to the excitement, Franklin Templeton, with $1.4 trillion in assets under management (AUM), has expressed a bullish sentiment towards Runes. This endorsement from a major financial institution adds significant credibility and indicates growing institutional interest in the Runes.

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Top Launchpads and Marketplaces for Runes

Some of the launchpads and marketplaces include:

Launchpads:

1. OrdinalsBot - @ordinalsbot
2. Runespad - @runespad
3. Magic Runes - @Magic_Runes
4. Luminex - @luminexio

Marketplaces:

1. Magic Eden on Bitcoin - @MEonBTC
2. RunePro - @Rune_Pro
3. SatsX - @SatsXio
4. Saturn - @Saturn_btc

Conclusion

Runestones are a new type of NFT built directly on the Bitcoin blockchain, offering unique advantages over traditional NFTs. They leverage Ordinals, permanent inscriptions on the Bitcoin Satoshis, to create digital time capsules with historical significance.  Runestones were distributed through a massive airdrop, rewarding early adopters and fostering a strong community. Their popularity has surpassed leading Ethereum NFT collections, indicating a growing interest in Bitcoin NFTs. With increasing demand for the underlying Rune tokens and institutional interest, Runestones are poised to play a significant role in the future of NFTs and Bitcoin.