1 April 2024 · Block Height 837200 · Bitcoin Price $71K

Welcome back to the Blockspace Newsletter!

Casey Rodarmor just dropped the Runes documentation, and we’re going to explain how they work as simply as possible, plus Bitcoin and Bitcoin mining news!

Quick Hits

• Bitmain drops the eye-watering S21 Pro, at 15 J/Th

• AntPool says they’re looking at Rare Sats.

• Inscription 66,666,666 on Block 666 & cost 666 sats.

• F2Pool mines the largest block ever.

Chart of the Week

Here’s how Runes actually work (as simplified as possible)

Runes are the new fungible token protocol designed by Casey Rodarmor that launch on the halving block #840,000. Runes are similar to BRC-20 in that they use messages on Bitcoin to communicate what the tokens do, but they are very different in how the work under the hood. Most notably, the Runes protocol is compatible with Bitcoin’s UTXO model.

We’re going to explain how the work at the absolute simplest level.

Let’s set the table: Like many other Bitcoin token schemes, Runes operations are written in the OP_RETURN of a transaction. The message in OP_RETURN does 1 of 3 things: creates a Rune ticker, “mints” a Rune ticker, or sends a Rune ticker.

Creating a Runes ticker

We “Etch” a Rune to create a new Runes ticker. When you Etch a new Runes ticker, you can specify total supply, how many can be minted at a time, and various rules around how much time is available to mint that particular Rune.

Minting a Runes ticker

Minting a Rune is the simplest operation. You simply specify in the OP_RETURN of the mint transaction that you “Mint Rune X” and the first output will contain the number of minted Runes that the “Etcher” specified.

Sending Runes

There a ton of techniques you can use to send Runes, but we’re only going to show the simplest one. The example below has a transaction input which contains 100 Runes and is sending 10 Runes to Alice and the remainder (90) back to themselves. This is actually how Bitcoin transactions work as well: If you send someone .5 BTC but have a 1.5 BTC UTXO in your wallet, you’ll send them 1.5 BTC and get 1 BTC back.

Congratulations, you understand Runes!

There are a ton of bells and whistles, additional mechanics to play with for Runes, but we will cover those in a future newsletter! Or you can just read Bob Bodily’s thread ▣

Links we liked

Tweet: Crazy facts about SBF

Tweet: SHA256 ASICs don’t actually output SHA256 results

Website: The Monke Appraiser - (appraising Nodemonkes)

Video: SuperTestnet releases "Hedgehog”, a Bitcoin payments L2 concept

Blockspace Podcasts

🎙️ Making Energy Markets Efficient With Alan Schroeder

(YouTube) Alan Schroeder of Synota joins The Mining Pod to go through the ins-and-outs of the energy credit system and how the Lightning Network can make it more efficient through real time settlement for energy usage.

🎙️ Bitcoin Season 2: BitPACs on Bitcoin with Tribe

(YouTube) BitPACs are the new DAOs, but on Bitcoin! We chat with Dillon Healy of Tribe, a BitPAC tool that allows users to group custody bitcoin assets, make Bitcoin proposals, and more!

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