The popularity of the Bitcoin Runes protocol in Bitcoin transactions is facing challenges. Since its launch on April 20, the Runes protocol has dominated Bitcoin blockchain traffic on eight different occasions, mostly during weekends.
The launch of Bitcoin Runes coincided with the fourth Bitcoin halving, which created a lot of excitement and led to a surge in transaction volume on the Bitcoin blockchain. Revenue from Bitcoin mining surpassed $100 million for the first time, reaching a record daily earning of $107.7 million.
Users spent $2.4 million in fees to inscribe runes and rare satoshis on the first halving block, according to data from Mempool.space.
Initially, transactions attributed to the Runes protocol accounted for more than 50% of all Bitcoin transactions, reaching a peak of 81.3% of the bandwidth on April 23. However, by May 2, this figure had dropped to 11.1%.
Although the Runes protocol experienced a resurgence in popularity on May 4, 5, and 6, as shown in the Dune chart, it has been on a downward trend since then.
As of May 22, Runes represented 12.7% of Bitcoin transactions, significantly higher than Bitcoin Ordinals (0.7%) and BRC-20 (1.5%). The majority of transactions were still conducted using BTC. This represents an 84% drop in Runes transactions since their peak.
Runes and BRC-20s are part of the Bitcoin decentralized finance (DeFi) movement, also known as BTCFi, which aims to enhance the utility of the Bitcoin network. With the addition of the newly launched Runes protocol to Ordinals and BRC-20, the Bitcoin network reached a record high of 926,000 daily transactions.
However, the true market potential for the Runes protocol may only become apparent after the initial wave of investor hype subsides. Nazar Khan, the co-founder and CEO of TeraWulf, believes that both Runes and Ordinals demonstrate the value of block space and that the Bitcoin network, being the most decentralized, secure, and robust network, will eventually derive value from this block space.
In the world of cryptocurrency, the Securities and Exchange Commission (SEC) is facing a tough battle against the legal firepower of crypto, similar to the epic clash between Godzilla and Kong.