Bitcoin Protocol Debate: Concerns Raised Over Runes Protocol's impact on Network Stability

Bitcoin core developer Luke Dashjr has criticized the Runes protocol, claiming it exploits flaws in the Bitcoin blockchain. He suggests methods to filter out Runes transactions but miners are not following his advice. Despite a drop in transaction fees, the surge in fees associated with Runes caused significant network congestion, leading to a record-breaking block with high transaction fees. Dashjr's criticism of Runes highlights the ongoing debate in the crypto community about the impact of such protocols on Bitcoin's core principles and the network's future direction.

Bitcoin Protocol Debate: Concerns Raised Over Runes Protocol's Impact on Network Integrity

April 21, 2023

In a recent post, prominent Bitcoin core developer Luke Dashjr has expressed significant concerns about the Runes protocol, alleging that it exploits inherent design flaws within the Bitcoin blockchain network.

Controversy Surrounding Inscription Protocols

The debate stems from the emergence of inscription protocols, such as Ordinals and Runes, which leverage Bitcoin's underlying technology to create and store data on the blockchain. While Ordinals have been criticized for introducing non-fungible token (NFT)-like functionality, Runes are fungible tokens introduced following Bitcoin's fourth halving.

Runes' Impact on Network Congestion

Upon their launch, Runes caused substantial network congestion and a surge in transaction fees. Dashjr argues that this deviation from Bitcoin's core principles contributes to blockchain spam, hindering the network's primary purpose as a secure and efficient medium of exchange.

Technical Analysis of Protocols

Dashjr differentiates between Ordinals and Runes based on their technical characteristics. Ordinals are deemed a "9-vector attack" that exploits vulnerabilities within Bitcoin Core, while Runes are considered a "5-vector attack" that technically adheres to the network's rules.

Miners' Reaction to Criticism

Despite Dashjr's recommendations to filter out Runes-related transactions, early indications suggest that miners are not complying. Ocean Mining, where Dashjr serves as CTO, recently mined its first post-halving block, with over 75% of its transactions stemming from the Runes protocol.

Transaction Fee Volatility

Bitcoin transaction fees experienced a significant drop just one day after reaching an all-time high average of $128 on April 20, coinciding with the fourth Bitcoin halving. The average fees for medium-priority transactions ranged from $8 to $10 as of April 21.

Halving Block Transaction Fees

The halving block at block height 840,000 included a record-breaking 37.7 Bitcoin (equivalent to $2.4 million) in transaction fees paid to Bitcoin miner ViaBTC. This block consisted of 3,050 transactions, resulting in an average fee of under $800 per user.

Longstanding Criticism from Dashjr

Dashjr has consistently criticized both Ordinals and Runes, highlighting their potential to disrupt Bitcoin's core functionality. He has previously advocated for bug fixes to address Ordinals and has expressed concerns about Runes' impact on network scalability.

Community Debate

The contrasting nature of Ordinals and Runes has sparked ongoing debate within the crypto community regarding their implications for the Bitcoin network. While some argue that these protocols offer innovative applications, others contend that they detract from Bitcoin's intended purpose and introduce vulnerabilities.

Ongoing Monitoring of Situation

The discussion surrounding inscription protocols and their impact on the Bitcoin network is expected to continue as the situation evolves. Industry experts and developers will closely monitor the development and usage of these protocols, evaluating their potential consequences on blockchain integrity and the broader crypto ecosystem.