Bankless - Runes: Tokens on Bitcoin | Casey Rodamor

Episode Date: April 18, 2024

Today’s episode is about exploring the frontier of tokens on Bitcoin with guest Casey Rodarmor. Casey is the creator of the Ordinals Protocol, a harmless protocol that simply allowed for arbitrary data to be inscribed into individual Bitcoin UTXOs, creating what are called Bitcoin NFTs. He is now also the creators of Runes, a second protocol, working to bring fungible tokens to Bitcoin.  Bitcoin is changing and Casey appears to be one of main reasons for the change. Soon he’ll be unveiling a new protocol standard for Bitcoin - called Runes, which wants to be a bitcoin-native version of fungible tokens, on the Bitcoin L1 - which is going to be the topic of the show today. ------ 📣 PERMISSIONLESS III | BUY TICKETS NOW  Bankless Citizens get 30% off: https://www.bankless.com/tools/perks  Use BANKLESS10 for 10% off: https://bankless.cc/PermissionlessIII  ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2    ⁠  🔗CELO | CEL2 COMING SOON https://bankless.cc/Celo  🔐 SAFE | ATTEND SAFE{CON} https://bankless.cc/SafeCon  ⚖️ ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum   🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle  🗣️TOKU | CRYPTO EMPLOYMENT SOLUTION https://bankless.cc/toku  ------ TIMESTAMPS 0:00 Intro 5:00 The Guy Who Changed Bitcoin 10:21 Why Casey’s Building 16:45 Ordinals Cultural Shift 22:43 Runes 31:40 The Ord Standard  45:27 Bitcoin Blocks & Blockspace Limit 57:47 Bitcoin Innovation Implications  1:02:41 Rune Parameters 1:11:20 The First Runes (Uncommon Goods)  1:14:34 Timeline on Runes & Trading Ecosystem 1:17:12 The Future of Runes/Ordinals 1:19:48 The Bitcoin Renaissance  1:21:34 Winning Over Bitcoin Maximalists 1:23:45 Casey’s Podcast     1:24:58 Runes Team 1:26:37 Closing & Disclaimers    ------ RESOURCES Casey’s 1st Bankless Episode  https://youtu.be/ktL77zEWcEc  Casey’s Twitter https://twitter.com/rodarmor   Casey’s Hellmoney Podcast  https://www.youtube.com/channel/UCflejnUswWof6yEMk9dRzOA  ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures ⁠ 

Welcome to Bankless where we explore the frontier of internet money and internet finance. And today on Bankless, we are exploring the frontier of tokens on Bitcoin. Since the introduction of ordinals to Bitcoin, over 65 million inscriptions have been made paying almost 7,000 Bitcoins, about half a billion dollars of fees to the Bitcoin network. As a result of the explosion of ordinals on Bitcoin, the entire Bitcoin ecosystem has experienced a changing of the season. Bitcoin builders, Bitcoin pragmatist, Bitcoin Renaissanceers have all rallied behind this shift in Bitcoin culture, spawning a new era for the protocol, while laser-eyed Bitcoin Monetary Maximilist continue to claim that Bitcoin is only for BTC transfers.

Fast forward to today, Casey Rotemore appears to drop yet another bomb into Bitcoin land, this time with a new protocol standard for Bitcoin called Rooms, which wants to be a Bitcoin-native version of fungible tokens on the Bitcoin Layer 1, which is going to be the topic of the show today. Our assistance to you through this episode is to ask a whole bunch of the dumb questions to actually make this thing make sense. So that's what we did. We have Casey on the episode today. Before we get into the conversation, we want to thank the sponsors that made this episode possible, including our number one recommended crypto exchange. And maybe the place in the future you can buy your Bitcoin tokens.

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who don't know anything about crypto. With CASA, you won't lose your private keys, and you won't accidentally take them to the grave either. Click the link in the description to get started securing your generational wealth. Bankless Nation, Casey Rotemore is the creator of the Ordinals Protocol, a harmless protocol that simply allows for arbitrary data to be inscribed into individual Bitcoin UTXOs,

creating what we call Bitcoin NFTs. He is now also the creator of Rooms, a second protocol working to bring fungible tokens to Bitcoin. Casey, welcome back to Bankless. What's up? Good to be with you guys. Yeah, it's been like a year since the launch, year and change, since the launch of ordinals that we did this.

David called it harmless. Dude, why did you say harmless? Are there protocols that are like more harmful? Well, all that really is an allusion to is just like it is within the consensus rules of Bitcoin to do this. So by definition, it works in Bitcoin. they're force harmless. Right, Casey? Yeah, I mean, I think they're, I think they're both pretty harmless protocols. I wouldn't have done them if I thought that they were bad for Bitcoin. I think that they're probably good for Bitcoin. And actually, I do not do things that I do think are harmful.

In particular, whenever I think of some idea that I think might lead to some sort of like MEV extraction being available on Bitcoin, I will not do it. The haters probably think that I don't give a shit and I'll do anything. But yeah, I'm generally pretty careful, actually. MEV on Bitcoin is, I think, where like this conversation logically concludes at, but maybe that it might have to be a podcast for a different day. The way I want to start this one, Casey, is kind of just going back to Bitcoin as this concept, right? So Bitcoin is known as this protocol that no one can change. That's why Bitcoin is what it is. You can't change the hard cap. You can't change people's account balances. No one can change Bitcoin. However, I would also say at the

same time, you have unequivocally, undoubtedly changed Bitcoin through the addition of ordinals into the Bitcoin block space. So it's on a new path that I would also say is holistically inclusive of its old path. But now the future of what Bitcoin is, what people are imagining for Bitcoin is now entirely different post-introduction of articles. And like we said, you have done this all from inside the consensus rules of Bitcoin. How does it feel to be the guy that changed Bitcoin? Feels good, I guess. I don't know. It's nice. I mean, if you look at the Bitcoin's sort of chart of Bitcoin fees over the last, I don't know, if you go to like Memple dot space and you look at it, I think the maximum is like six years or seven years or something, you can see that there's like

long period with very low fees and then a short period of high fees and then another long period of no fees and then a short period of high fees and another period of low fees. And then we get to like January, February of last year and the fees just spike. The fees just spike and take off. And they've been, except for one brief moment where the Memple actually did clear for like a few days, there's been a backlog of quite a few blocks of transactions since then. And I think that's really good. Bitcoin, as the subsidy declines, every four years there's a halving and the subsidy of the subsidy, i.e.

the new Bitcoin created in each block, which are rewarded to the miners, gets cut in half. So Bitcoin's destiny is relying on transaction fees. And those transaction fees must be high and they must be persistent to secure the network. So although, of course, I do think that the most important use case of Bitcoin is Bitcoin, the monetary asset. I think Bitcoin is enough, Bitcoin the asset and transferring that asset and be able to save in Bitcoin and pay people in Bitcoin is like enough of a justification for the network to exist. I think that having sources of fees from as many different sources as possible is good. So I think it's, I'm very happy to have contributed to that.

And I don't, you know, Bitcoin's having is really precipitous, right? Cutting in half every four years is a really substantial drop. Like we're going down to 0.16 Bitcoin after this next halving in like four days. And then after that, it's even less, right? So in a couple halvings, we'll really be down to not very much at all. And so I think that the fee market needs to get jump started sooner or later. There will be other sources of demand for block space, but it's very good to get those sources of block space, even if they're from unsavory things as, you know, monkey JPEGs and shitcoins.

Unsavory but harmless, right, Casey? It's just harmless right here. I mean, I think a lot of it is unsavory and harmful, right? I mean, the vast majority of NFTs, I think, are like stupid, ugly, like waste of time and space. Same with fungible tokens. I think actually fungible tokens are probably even worse than NFTs. But ultimately, I think that they are essentially a form of gambling, a form of speculation, right? Like, I think that if you zoom out, cryptocurrency is actually just this big MMO that people play together with all these different shiny currencies that you can exchange for money. And they provide a sort of like this online digital casino that people like to play. And there's different levels of harm, right?

Like, so I think that the worst things are like outright scams where there's like some, you know, token and then there's some rugpole. I think the next worst thing are things, which I would say are like, I kind of call them like structural scams where you have founders who are very well-intentioned, but the things that they're building are never going to come to fruition. And I think that's like 90, maybe 99% of everything out there, right? So even if they're not scams, even if there's no dishonesty in the heart of the creators, they're making all these promises that are never going to come true. They meant a token. It never goes anywhere. It has a classic like pump and dump, you know, fall off. maybe least harmful is like meme coins where everybody kind of knows like, okay, this is not going to be the future of finance or whatever. But they still, you know, go up and down. So, yeah, people lose money. People make money. I don't think overall it's a great activity.

I don't think a lot of it provides really much benefit, much like net benefit. But I'm sort of glad to move people onto Bitcoin, hopefully, and move people towards the meme coin kind of direction of that activity and not thinking that, you know, there's going to be like a, what you can call it, a metaverse, like that some token is going to get you access to, you know? So I guess your comment is, most of the use cases of the stuff that you're building or enabling on top of Bitcoin are kind of like scams or like not great. This is kind of a question.

So Casey, why are you doing it then? Um, well, so I'm, I'm not a huge fan of, uh, most of cryptocurrency outside of Bitcoin. Um, I think that it's like, pretty useless. Um, a lot of it is, is, is, is, is, is, is, is, is pretty broken. Um, and if people want to do those things, I would prefer them to be paying those fees to Bitcoin and securing, uh, Bitcoin the network. Um, I think it's also kind of unfortunate if people sort of get into cryptocurrency into like NFTs, or fungible tokens or whatever, and they land in some random part of the ecosystem, and then they stay there, and they never get to, like, Bitcoin the asset, right? They, you know, land on some other chain, like, you know, Tron or Ethereum or something,

and they get huge bags on that chain. And I don't think, like, the, I don't think those chains are super decentralized. Like, I'm not super confident that Ethereum, for example, could withstand, like, a nation state, attacker just due to its complexity and its fragility. So I think it's unfortunate if they do those things and they land in these other parts of the ecosystems and they never like make it to Bitcoin. So I'd sort of like to redirect a lot of the DGens just directly towards Bitcoin.

So yeah, even though a lot of these activities, I think, are sort of like net negative, I think that the moving those activities onto Bitcoin is is a net positive. Okay, so there's nothing about like ordinals or what we're going to get to runes that's like fixing the humans that build on top of shit coins and NFTs. Like that's all saying the same. You're just saying this is a means to an end to produce that same kind of activity, not fix that activity, but at least move that activity towards a place where at least will actually help sustain Bitcoin, which you see as like, It's a noble pursuit. Bitcoin is a noble pursuit. And so at least like the exhaust from NFT speculation and meme coin speculation can at least be funneled into the Bitcoin system and also bring a bunch of users much more proximate to BTC the asset. That's that's your perspective.

Yeah, I mean, there's a couple other things. Like as far as the NFTs go, I do think that there are some things about inscriptions that are better than NFTs on other chains. So, for example, inscriptions are not arbitrary smart contracts, right? They are, there is a single implementation of inscriptions, and that is that, which is in the org client and the rules for how inscriptions are created and transferred. And there's only one way to store inscription data, which is on chain. And so I do think that those things are better. I think it's bad if somebody winds up buying a NFT on another chain, and eventually what they

wind up owning is they own a, you know, link. to a JPEG on a Amazon server, or if they own a hash that points in IPFS, and they don't understand that when the last computer ceding that data to IPFS goes away, their asset becomes worthless. Or they don't understand that each NFT, each ERC-721, is a different smart contract

that can have its own bugs, its own backdoors, its own upgrade keys or whatever. I don't think any NFT purchaser does, you know, quote unquote, due diligence. So I think it's good to, I think those aspects of inscriptions are good, that they're all on chain, that there's only one smart contract that there's sort of this uniformity that people sort of, just from a sort of consumer protection angle. And then with Roons, I think it's good. I'm very like shit coin forward.

I'm, or like, I'm unapologetic about this. I'm not telling people that this is the future of finance. I'm not telling people that this is going to, you know, we're going to have like pharmaceutical research on the blockchain or whatever. I'm saying like, no, this is for like memes and shit coins. And the biggest tokens, I mean, people have been pre-degening on runes, which is pretty insane. Like it hasn't launched yet. And there's all these people saying like, oh, like buy our inscription, we're going to air drop you like ruins or like whatever. But they're like all meme coins.

And so I think it's, I would rather there to be more meme coins because I actually think that even though meme coins are like, yeah, obviously they're just, you know, pure speculation. I think it's worse than projects that say, oh, we're going to do something that's like really revolutionary. And whether they believe it or not, whether they're being honest or not, that pitch, I think, is a lot more likely to confuse people and cause people to think that they're investing in some sort of like, like a tech stock, right, that has this chance of going to the moon when in reality, like almost none of those have paid off. So I think that there is that advantage to inscriptions and to runes,

that they sort of, in some ways, are better, either structurally or due to the technology or due to just the sort of the zeitgeist around them. And the same thing about their only one being one implementation of inscriptions also applies to runes. Roons are not an arbitrary smart contract. They're not each one is an arbitrary smart contract. Each one has a small number of parameters that are set when the run is created and are unchangeable after that.

And so it's literally just like five numbers that determine the parameters of the run, including a literal like pre-mine. Like if you want to pre-mine your run, rungs have an open mint mechanic similar to BRC20. And you don't have to, but you can when you create your run have, have this. open mint, and you can also have a pre-allocation to yourself. That is called the pre-mine. And if you go to the page of the run on ordnals.com or any other block explorer, it will say pre-mine and we'll tell you the amount of the pre-mine. You're printing free mines into the Bitcoin protocol. Yeah, into the Bitcoin protocol, right in there, just right in there.

So, Casey, I almost was tempted to ask you a little bit about, like, whether you think stable coins or a shit coin, whether that's possible in the infrastructure of your building. but we'll save that for later. I want to ask the broader context of this. So the way David introduced you, and you seem to partially accept this, is as somebody who has changed Bitcoin. And what's interesting is you can totally see

the stuff that you're building with Ordinals and now later ruins is definitely changed the fee market of Bitcoin, right? Like we've seen that. And by the way, from like a, you know, I consider myself a Bitcoin or I don't know if they'd accept me. I accept Bitcoiners and Bitcoin culture and all of that. of this one of my big concerns long-standing concerns of bitcoin was didn't have a sustainable

security defense fund right once block subsidies run out and now this has really ameliorated that concern for me like i'm i'm seeing block space being sold for other use cases and and so like that's great from from my perspective um but when when david says you've you've changed things i think he's talking about the fee market and you'd acknowledge that and that's part of the value proposition of what you're you're bringing but also you've sort of changed the social layer i would say like It's now, it's within the Overton window of acceptance to, like, build on Bitcoin again. Not with everybody, but I would say with, like, with generally, like, crypto participants and maybe, like, generally inside, like, Bitcoin culture.

Building is a thing, once again. And so I guess I'm curious from your perspective, how, what has been the effect of, like, ordnals on Bitcoin and generally, maybe from a cultural, you know, like, perspective? Has it brought this renaissance that we've been talking about? And, like, you know, is that significant? Because some bitconers we talk to is just like they don't even acknowledge that Bitcoin culture is kind of like a thing, you know? Like, tell us about that.

Yeah, yeah, yeah. So, I mean, before inscriptions, I would say that Bitcoin culture was in pretty rough shape. It was sort of this very boring and very insular culture, right, where everybody has this like, I mean, everybody has this like pet rock and like number go up, right? And the rock gets more and more valuable. And that's not bad. Like, that's Bitcoin's value proposition. But that is not a very interesting thing to build a culture around. And it had gotten very ideological, I'd say, where people were sort of putting this like very boring, very annoying, like moral spin on it, where Bitcoin was like the savior to like the poisonous like fiat world. And to be clear, I do believe that. I do believe

that Bitcoin is the savior to the poisonous Viat world. But it had just gotten very boring, very insular. Everybody was listening to the same, like, six podcasts and going the same six, like, circle jerk conferences. And so, Ordnals brought in a huge mass of just, like, D-Gents who, like, just wanted to play and, like, have fun and make money and pump their, like, pepe bags. And overall, I think that's good. I mean, it's just a whole bunch of new people with new ideas. I don't remember when we started hearing this idea of, like, a Bitcoin Renaissance. It was probably like a couple of months after ordinals and inscriptions started taking off. And at first I was really skeptical. I was like, what are you talking about? These are like JPEGs on the blockchain. Like there's no renaissance. Like what are you talking about guys? Like these are

NFTs. Like that's just what they are. Like this is not a renaissance. But overall, I think like as time went on, I became more and more convinced that that was actually the case. Right. We actually saw a lot of investment, a lot of people who like wanted to build, smart people. like Rindahl, who were all of a sudden prominent on the scene being like, oh, look, there are these like interesting things we can do with this. I still think that inscriptions are like not going to, you know, be the basis of some sort of, you know, like technological renaissance. But I do think that that new culture and that new energy and all those new people have to some extent led to some kind of Bitcoin Renaissance, much to the consternation of the, a lot of the OG bitcoinsers

who some of them have really dug in their heels and they're like actively trying to fight all of it and they're going to lose, right? The same thing that makes Bitcoin a good, uncensurable digital money also makes it a very good platform for, you know, you're not being able to censor censor other people's preposterous ideas. So they kind of can't win. And like once you had inscriptions, and once you had big markets for inscriptions, then you started seeing effort being put towards building all these other things. So, for example, the ability to borrow Bitcoin against your inscriptions because you want to get some liquidity so you can degen on other inscriptions. So people built that. That's kind of defy, I guess. That's kind of defy. And there had

been no demand for such things. That's why such things didn't exist. And then with BRC20, BRC20 is a fungible token standard, which is a meta protocol on top of inscriptions. Like inscriptions are a meta protocol on top of Bitcoin. And then BRC20 is a medical protocol on top of inscriptions to make fungible tokens. And with that, there was all this like BFI or BitcoinFi or whatever using BRC20 is to do God knows what. BRC20s are a really terrible standard that Rooms improves on in a lot of different ways. And I'm sure that once we have a robust, you know, market for Roons, we'll then see a lot of DeFi constructs on top of Rooms.

So it's sort of like a demand-led renaissance, right? The DGens want these things. They want to trade. They want to borrow. They want to do whatever preposterous things they want to do. And once enough people want that and are willing to pay for it, then we start to get development of those things. Yeah, definitely in this conversation, I want to open up like what is composability look like in the Bitcoin defy space, because like you said, first we have Ordinals, now we have Roons. And I really want to start to get into the Roon's conversation kind of unpack the construction of Rooms.

But maybe we could actually do that by starting with the Ordinals protocol first. So, of course, Ordinals introduced non-fundable assets. I don't know if you would call them tokens, but at least non-fundable assets into the Bitcoin network, complete with like arbitrary data. not unlike leveraging Bitcoin block space in the way that Ethereum layer two's leverage Ethereum blob space for those Ethereum listeners who only speak Ethereum. So like an ordinal, it creates a single UTXO and the Bitcoin. Just to be clear, like the terminology is often mixed up. Ordinals or like ordinal theory, quote unquote, is this actually very simple protocol for

tracking SATs, for tracking individual Satoshi's, for assigning them individual. identity and then tracking them across transactions. So you can sort of pretend that each Satoshi, which is one one hundred millionth of a Bitcoin, can actually move between transactions and quote and quote lives in a specific Bitcoin UTXO. And then an inscription is assigning digital content inscribing that Satoshi with content that's been included on a Bitcoin transaction. And then that SAT is an inscription which becomes this, this NFT. I call them digital artifacts for weird reasons, but token is totally fair. They're NFTs.

Yeah. Perfect. Yeah, that's a perfect explanation of ordnals. So I don't actually think we need to go even any into more than any of you than that. I think that was great. How, as we get into the actual architecture of runes, like, is anything carried over from ordinals? It's a brand new protocol straight from a scratch.

How do you, when you open up the ruin explanation, how do you start it? Yeah, I mean, so yeah, it is a brand new protocol started from scratch. One of the things that I didn't like about BRC20 is that, that because it's a meta protocol on top of inscriptions and ordinals, it's very complicated because it inherits the full complexity of ordinals and inscriptions and then adds this new layer on top of it. So Rooms is a totally separate protocol. It doesn't store data in the same place as inscriptions. It uses operturns, which are the benefit of opertons is that you only have to make one transaction to put data in an opertern as opposed to an inscription where you actually

have to make two transactions, one transaction to commit to the. the data that you want to include, and then another transaction to reveal that data, which is just because of the way that Bitcoin signatures work and the way that the witness data is stored. The Roon Protocol Messages, which are whimsically titled Roonstones, are stored in op returns, which are just these kind of dummy outputs of the Bitcoin transaction that say, hey, this transaction, this output is never spendable, so you don't need to track it in the UTXO set. and here's like a script, which would normally be the locking script of this output, but instead we just use it to carry arbitrary data.

So the runes extend UTXOs to not just have a balance in SATs, but to have a balance in any number of different routes. So your UTXO, which is worth a thousand SATs, can also have, you know, a hundred of the Foo run and a million of the bar run. And when a, yeah, we're going to have the bar run soon. So when you spend a transaction output, like outputs are created by transactions. And then when you spend them as inputs to other transactions, they're destroyed, they go away, they're deleted.

This is sort of one of the difference between Bitcoin and Ethereum. Ethereum has an account model where every wallet has a public key. That public key doesn't change. And all of the state that you have with Ethereum, your token balances are all associated with that one account. And so when you spend Ethereum, you debit and credit that account. Bitcoin has this odd model of the UTXO set, the UTXO set model, unspent transaction output set, where your wallet has a discrete number of these little piles of Satoshi's. And when you send somebody, Bitcoin, what you're doing is you're taking some of those piles you own,

putting them into a transaction, which destroys them, like takes them off the table, and creating a new output with some balance of sats that that other person owns. And so inscriptions, you know, ride these sats through these outputs. And similarly, runes also augment UTXOs with balances of different runes. So in the absence of a Rune protocol message, if you have a transaction that, just spends inputs that contain runes, by default, all of the runes and all of the inputs go to the first non-op-return output of that transaction. So sort of the default is to consolidate to one output. And then if you want a different allocation, you know, you don't want all of your

runes to go to the first output. You include a runestone, which contains things called edicts, and edicts are just instructions that say which amount of which runes should go to which output. So that way you can get like an arbitrary distribution of runes between those different outputs. Okay, so let me try and summarize this to the best of my ability. Maybe you'll have to actually check me on something. We don't actually talk about UTXOs too much on the bankless podcast, surprise, surprise, because it just doesn't come up that much in the Ethereum land. I think the only system on Ethereum that uses UTXOs is the Aztec network, and it does that for privacy purposes. And this is the interesting thing about the account model universe and the

UTXO universe is, I'm pretty sure those are like kind of the only two like digital accounting systems that we've really come up with. It's either account models or UTXO models. And like think for bankless sisters who are like I'm familiar with UTXOs, think about like a UTXO as like an arbitrary denomination of like a bill. Like typically in Fiat land, we're used to like one and five and 10 and 20 bills. A UTXO like transaction is like a specific bill that's denominated in a specific big number of Satoshes. So, like, you would have, like, a $26.72, like, dollar bill, but that's a U-TX-O. But then you have another U-TXO that's, like, $13.42, and then you, as the owner of a private key that has both of these U-TXOs, you can make a transaction that combines these U-TXOs

together, and all of a sudden they, like, I can't remember the numbers, but, like, you would add those two U-TXOs together to make a third U-TX-O, which then you would send to someone for when you're sending them Bitcoins, and then you would actually get another UTXO back, back to your own private key as like the rest of what's left over that you didn't send to that person. So Bitcoin has a system for like tracking and spending UTXOs. And Casey, what you're talking about is that Roones also has a system for tracking individual Satoshis through the UTXO set that permeates, no? Roons doesn't track individual Satoshes. So Roones don't exist on and on a on a a single Satoshi in a UTXO.

They just exist on the UTXO as a whole. So there's no sat tracking involved. So when you spend, like, you know, for example, like the same example, like, let's say you have a UTXO that has 10 fu runes and another UTXO that has 10 bar runes, those aren't on any particular sat in the UTXO. And then when you spend them, you know, by default, you have your like, your output. Let's say your first output is not an operative turn. that output will get both, all of those runes.

So it'll have however many sats, and it'll have 10 fu runes and 10 bar runes. Okay. So if I want to transfer just runes, how does that process happen? So you create a transaction. Let's say you have like, you want to send like me like 50 fu runes.

And let's say you have one UTXO that's worth 40 fu runes. and another UTXO that's worth 20 Foo Rooms. So you don't have an exact amount to send me. So you'll create a transaction that spends both of those two UTXOs, and then you'll create one output. You'll create two outputs. Let's say the first output is going to you, and the second output is going to me.

They have your address and my address, respectively. And then you'll include in an operturn, what's called an edict, and in that edict you'll say, send 50 of the Foo run to the second UTXO and send the remaining 10 to the first UTXO. So it's all UTXO based. There's no substructure like within UTXOs. Casey, I just have a whole bunch of dumb questions. I feel like I just want to ask these dumb questions.

Go for it. Go for it. Everybody has these dumb questions. Super dumb then for a minute. Ordinals for NFTs, runes for tokens. Is that sort of how you think about it? Yep. Okay. So Ordinals is more optimized for NFTs and Roons more for tokens. And when you say like when something like Ordinals or like Roons, you know, like comes to Bitcoin, it was actually being deployed because we're not talking about like a Bitcoin hard fork, of course. And we're certainly not talking about a smart contract. But like you're somehow storing data inside of Bitcoin blocks. Are you kind of like proposing a standard or is there some code that lives, you know, some are. Does that question even make sense?

No, it totally makes sense. And I think it's just, it's a very different model from other, other chains, right? Like when you want to do something on Ethereum, you just sit down and you write a smart contract that implements it, and then you deploy that smart contract to Ethereum. And then the Ethereum consensus rules enforce the rules of your smart contract. Yeah, exactly. Or, and also you can just set a standard, right? So you say the ERC 20 standard, that's not a specific, that's not one single smart contract.

That's just sort of all of Ethereum coordinating and saying, oh, yeah, when we deploy tokens, we're going to use this particular, like, code template set of smart contract. Yep. Yeah. So ordnals, inscriptions, and runes are all implemented in Ord. Ord is the reference implementation of Ordinals, inscriptions, and runes. If you go to ordnals.com, what you're talking to is an instance of Ord running on one of our servers.

And you can go to GitHub.com slash ordnals slash ORDNs. slash ORD and download ORD. So, ord is essentially a, it's a piece of code that runs. It connects to a Bitcoin Core node, and it downloads blocks from Bitcoin Core. And it looks for, it essentially processes each Bitcoin transaction and figures out what it's doing according to Ordinals, inscriptions, or ruins. It sees where the sats are going from the inputs to the outputs. If there's inscriptions being created, it records that those inscriptions are created and then tracks them as they move. And then if runes are being etched, that's the term for creating a run. If runes are being

etched, it notes that and also records the transfers. So there's no change to Bitcoin. Either there's no change to the Bitcoin software. There's no change to Bitcoin Core. there's no change to the consensus rules. This is just a piece of software that people can run on the side alongside their own Bitcoin Core node. And then it will tell them all about ordnals and inscriptions and ruins and those balances. It also comes with a wallet so that they can make their own transactions. So essentially, it is a standard that you can run alongside Bitcoin.

And if you follow the standard, Bitcoin transactions now have this addition. meaning that they didn't have before related to the creation of fungible and non-fungible tokens. So the term that's kind of developed is that it's a meta-proticle, that it is a protocol that runs on top of this other protocol. Bitcoin is completely agnostic to ordinals and inscriptions and ruins. It doesn't know anything about them. But people who are interested in this meta-proticle run this additional piece of code that then processes Bitcoin transactions according to the rules of that meta protocol and then tells them what the state of that meta protocol is.

Yeah, maybe one way to explain this is like Ord is like a special pair of glasses that let you see things that the actual Bitcoin core clients don't actually see according to particular rules. Like some birds can see an ultraviolet that humans can't see, something like this. Where there is data happening. It's just not Bitcoin core.

Like an interpreter of some sort. Yeah, yeah, yeah, it's an interpreter of a, a specific universe, which you would call like the Ordinal universe, Ordnial universe, Ord universe. Yep, that's right. And this is like I have worked on Bitcoin or I've been into Bitcoin for a long time. I was briefly a Bitcoin core contributor, not a very good one. But I was never interested in changing Bitcoin. Like I would see the process, the political process of proposing soft forks and endless bike shedding and finally getting them through maybe if you're incredibly lucky, and I just would rather, like, drink poison and jump off a bridge. So I,

when I started thinking about ordinals and inscriptions in, like, early 2022, I knew that I didn't want to change Bitcoin. I just wanted to try to figure out a way of, like, where in Bitcoin is there a little bit of space that I can then fit this meta-proticle in? And the space that ordinals fits into the sat tracking, like how do people say where they want their sats to transfer? The way that they, the place that they say this is in the order of the number of the inputs and outputs. When they want their sats to transfer to a certain, to a certain destination, they create these transactions that the only thing that matters from the point of view of the ordinal protocol is the number of inputs, the number of outputs,

their value and their order. And so by, by. changing them, they can transfer these sats to any place, right? So that's kind of the space that is free to the user, right? Because Bitcoin Core, the protocol, allows you to create these transactions with any number of inputs and outputs in any order. So that's where ordinals fit in. And inscriptions, the data for inscriptions, that fits into the witness, which is essentially a signature, but it's a little bit more complicated because it's a Bitcoin script. And that that signature also allows you to push data, which might be a signature, it might be a public key, it might be any number of things. And it allows you to, that is where I sneak in the data

for inscriptions in this signature space, sort of using this trick that that fences them off in a way that they're just ignored by the Bitcoin script interpreter. And then Roon's operturns are kind of like the pub keys. They're these special public keys that just, just say this public key is invalid. They're actually scripts. And then they contain some additional data after they say that they're invalid that just gets ignored by Bitcoin Core. So it's in all of these little nooks and crannies that my weird little protocols fit into.

There's sort of these places in the Bitcoin protocol where they're there for the user to make the kind of transactions that they want, to have whatever kind of input and order of the inputs and outputs, whatever kind of, uh, locking scripts and unlocking scripts they have. And then that data is just used for these higher level protocols that interpret it in different ways. Okay. So I think I understand this. So like the what what ordnals and runes are built on is like you partially kind of like a specification, which is sort of like ord. And then there's also so you got the specification that everyone agrees to, this is how we're going to do this. And then you have some interpreter code that somebody who's

running a Bitcoin client kind of like runs in parallel if they want to interpret it. But all of the data itself to make ordnals and ruins possible is actually stored within a Bitcoin block. And you're showing you're being creative about this. So you're shoving it in all of these like weird locations where... I've become an expert at shoving weird things into Bitcoin blocks. Yeah, yeah. And you just shove this. And like it doesn't really matter.

Like, because even if it looks like ugly inside of the block itself, it doesn't really matter. It is ugly. It's very ugly. Okay. So you're just like, you know, you're shoving it wherever you can find some space in this kind of like container that wasn't really built for this type of expressivity, let's say. But the result of that is you get NFTs and you get tokens. And the reason Roons is an improvement on using Ordinals and BRC 20 for tokens is because Roons is like tailor made for tokens. You don't have to go through

like multiple steps of the protocol. And okay, so I'm understanding the picture here. Let me just validate that last piece. So it is the case that all of the data to like reassemble a Roon's token or an like ordnals NFT, that's all inside of the Bitcoin block space itself, right? That's correct, yeah. There's no other, there's no third-party dependency here. You're not storing like the data somewhere else. It's inside of a Bitcoin block. And that, yeah, it is.

And that has some nice properties. For example, everybody could stop running their org nodes for like a week. And a week later, everybody starts them up again. And in the meantime, all the data and all the transactions are still there. on the Bitcoin blockchain. And so then they can just, you know, boot up again, read the data that they've missed or start up from scratch and get all of the data that they missed. There's no real sort of, I mean, there's no real like consensus process that the nodes

have to engage in. They just read these messages off of the Bitcoin blockchain. Which I would say is very aligned with Bitcoin or philosophy of everything is backwards compatible. There's no extra trust assumptions going on. here. This is just Bitcoin. This is just Bitcoin. And I know at this point I know all about the pain of backwards compatibility. The first version of Ord, it had all these, sometimes just omissions, sometimes outright bugs that meant that a lot of inscriptions that you would want to accept,

you would want there to be, were not recognized by the Ord client. And in the meantime, people got really attached to their inscription numbers, which was just the number of the inscription in the order it had been mined in a block. So they started from zero and they went up. And we had to do this really hideous thing, like to kind of keep with the backwards compatibility mindset of creating these like negative inscription numbers that were called cursed inscriptions, which were these sort of new ways of making inscriptions that were desirable to make, but which weren't recognized by the first version of the protocol. And in order to allow those to have, happen without disrupting the existing inscription numbers. They were given negative inscription

numbers up to the so-called Jubilee, where from that point forward, cursed inscriptions and blessed inscriptions alike all got positive inscription numbers. So this very silly protocol, like I've kind of taken the Bitcoiner like backwards compatibility thing to heart, and it sucks. It sucks. I understand why people like to do hard forks, right? You do some. hard fork, you're like, whatever, I'm changing the rules. You don't need to think about backwards compatibility. It's kind of good for devs. Sometimes it can be good for users. But yeah, it's all like very backwards compatibility, no matter how disgusting that makes the code. Mantle, formerly known as BitDAO, is the first Dowled Web3 ecosystem, all built on top of Mantle's first core product,

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and be a part of the transition to smart accounts. Click the link in the show notes to learn more and take your first steps towards smarter crypto management. Okay. So another basic question here, Casey, is how much can we fit inside of a Bitcoin block? So obviously there's going to be the vanilla Bitcoin type transactions that have been with us since the beginning of Bitcoin. And then there's the Ordnals activity and the Roons activity. But the Bitcoin block isn't getting any larger, right, like quite famously.

So how much of this stuff can we actually fit in some? of a block? I don't know. Not a ton. I mean, so a Bitcoin block is kind of weird at this point in terms of how big it can be. There's a limit of one million virtual bytes, which is, again, this is like a weird Bitcoin backwards compatibility like Cluge or Hack. So Bitcoin blocks originally were one million bytes.

and there was a desire to do a block size increase at the same time that there was a desire to move some data called the witness, which you can think of as being signature data, outside of the transaction, to put it in a different place that is not the transaction. And this is for like a lot of technical reasons. The main reason being that the signature,

you could change it, you could maliate a signature and take somebody's signature, create a new valid signature that had different bytes in it. And if that signature affects the transaction hash, that meant that the transaction ID would change. So somebody would broadcast the transaction. Somebody maliates the signature. And then it gets mined in a block with a different transaction ID. Still doing the same thing. It's not like anybody's funds were taken, but like not good at all. So these two things, upgrading, increasing the block size, and moving the signature data outside of the transaction, or we're done at the same time in an upgrade called Segwit. And so now, all of the old bytes

that include everything in a transaction that it isn't a signature, those count towards the one megabyte block limit. And then the signature data gets this 75% discount. So if you only have signature data and nothing else, you actually get a 4 million byte block. And so Bitcoin blocks these days, sort of normal Bitcoin blocks are like two something megabytes. That's the average when you get these transactions and signatures and how the discount all plays out. So obviously this is not a lot. Two megs every 10 minutes is not a ton. So not a lot can we fit inside of Bitcoin blocks. So one of the implications of that is, or the NFTs that are birthed on top of this, the tokens birth on top of this, are they going to be, like, relatively scarce, like, not very, very plentiful,

or will they just be instantiated and then they'll have to kind of, like, trade on other chains and, like, exchanges, and it'll happen on side chains and that sort of thing? Or, like, what are the downstream implications of this scarcity? Yeah, I think, Ryan, I think you're also kind of just asking just, like, what are the transactional constraints of tokens as, like, if we're going to be trading and sending around a bunch of tokens, like how much activity can the Bitcoin layer one support? Is that kind of a big question? That's part of it.

Yeah. I'm just, yeah. What are the downstream implications most broadly, Casey, and having this limit, this very, very much like a block space limit here? Yeah. So everything you said, the blocks are going to be full. Fees are going to be high. And people are trying to figure out how to do things on L2s.

So for just moving Bitcoin, there's the Lightning Network, which has positives in the negatives. And there's also a whole bunch of activity now on L2s for Bitcoin. So different, you know, ways of making L2s for Bitcoin. Sort of the investment in roll-ups on Bitcoin has increased enormously. A lot of people are trying to explore how to do roll-ups on Bitcoin. And just like ordnals and inscriptions and runes, all the people are trying to deploy these things on Bitcoin have to figure out clever ways to make them fit on top of Bitcoin. They can't just sit down and do like, um, you know, Vim rollup dot soul, right? They have to kind of trick Bitcoin into doing it. So, like as an example, there's something called BitVM, which is a way of tricking Bitcoin into doing

arbitrary computation. Um, I'm not super good on how the details work, but basically you have this like big tree of computation, like where each leaf of the tree is a step in that computation. And you have some people who are like the BitVM validators who are running this kind of roll-up, who are committing to executing this computation faithfully. And Bitcoin cannot do that computation. But if they do it wrong, somebody can post a proof to the chain where they point to one step of this computation. and they say, look, this one step of this computation was done wrong. And then the validator of the Bitcoin, of the BitVM rollup gets slashed or I don't exactly know how that happens.

These are like fraud proofs, optimistic rollups for Ethereum folks might come to mind. Yep, exactly. And then other people want something called Opcat, which is a simple op code that just concatenates two pieces of data. This is the Stone Age that Bitcoin is living in, all right? There is a huge debate about whether we should. should create an op code which sticks two pieces of data together. A fierce debate, right? And with something like that, I think that actually allows you to do pretty hefty computation.

And maybe you could do like a very expensive ZK verifier on Bitcoin and maybe do something like a zero knowledge rollup. But all this stuff is in the early phases. So yeah, the answer is fees are super high. They are pretty scarce. Like large inscriptions, like large bite-wise inscriptions are more expensive and more scarce. There's like sometimes people will pay to have an entire block mind that is only a single four megabyte inscription. They call that ripping a four megger. Wow. And yeah.

Wait, has that been done more than once? I know that it was done once. No, it's done a few times. Yeah, it was done. The Teproot Wizards did one. It costs like hundreds of thousands of dollars? You need to have a proprietary relationship. The relationship of the minor, right? Tens of thousands. Yeah.

Although there is a, the need for proprietary relationship is starting to become less so. Although that one, yeah, you do need a proprietary relationship. And then there is French Montana released a song. He's like a rapper. He released an MP3 as a form-egger. No way. A whole MP3 is on the big. Yeah, whole MP3.

This must piss a lot of people off. Oh, it does. They're mad. They mad, bro. With all these Bitcoin layer twos, which are like one of the more exciting things in the Bitcoin landscape, at least from my perspective, will Rooms be like composable or can they be composable and interoperable with some of these, like, a lot of the layer twos I've seen are like, you know, EVM optimistic roll-up O-P stack forks.

Will maybe is it, maybe it's up to the bridge contract? I don't know how it works, but like will Roons be able to go up to the layer twos? Yeah, presumably, yeah. I mean, the way that Roons transfer is very similar to the way that Big, You put them in UTXOs and then spending that UTXO lets you spend the runes. So any roll-up, which is designed for Bitcoin or any L2 or any sort of wrapping protocol or anything, you should be able to use it to transfer runes. And I kind of expect that runes will become the de facto fungible token protocol on Bitcoin.

kind of much to my own surprise. There are, I didn't set out to, you know, make a fungible token protocol. It wasn't really a goal. It was really because of BRC20s, which were very, very popular on Bitcoin. The reason they were popular is because they have this open mint mechanic where you say, anybody can mint this token and just create a transaction to get some of that token. So there became fabulously popular. I mean, the chain was clogged for months with BRC20 transactions.

It has a lot of downside. each operation requires making an inscription, which takes two Bitcoin transactions minimum. You have to commit to this JSON blob, which is where BRC20s store their messages, in an inscription, and then create another transaction that actually reveals the inscription. So that's because it's based on the inscription protocol, it's two transactions minimum to create an inscription. And then transferring your BRC20 takes a third transaction, actually transfer that inscription according to the rules of ordnals to send those BRC20s to their destination.

So Roons improves on this. It's just one transaction for everything. It's very compact. It's binary. The spec is very clear. It comes with a reference implementation. One of the big problems with BRC20 is that the creator, Domo, he just released it as a spec, like a like a Git book, like sort of markdown spec that just described how it worked.

And then left it up to other people. to implement it, which led to a situation where one exchange unisat makes the canonical BRC20 indexer. I don't think it's open source. And so the protocol has a hard time like evolving. There is not a really good open source reference implementation that everybody uses and everybody sort of follows for upgrades. So Roons only takes one transaction to do everything. It comes with a full, a very, very detailed spec and a full reference implementation. So I kind of expected to become the de facto fungible token standard on Bitcoin. There's some other sort of like serious projects to do non-fuggeable tokens on Bitcoin.

There's a project called RGB, which is doing it in a completely different way. And then there's also a project called Tapproot assets. RGB and Tappert assets are much, much more complicated than Roons, like much more complicated than Roons. And they also store their data off-chain. So if you want to build up the state of where those tokens are, you need to access all of this off-chain data, which I think has just terrible consequences for UI and UX and the complexity of the protocol. So they've been going for a while. And I actually was really hoping that Tapperut assets would like take off and become the dominant fungible token standard.

They started a long time ago and like, made their public announcement before, way before I started working on Rooms. but development has been super slow and the protocols are very, very complex and not seeing a whole lot of uptake. And also, they're not really designing for DGens, which I think is really important. I think the reality is that, like, degenerate speculators are where the first users come from. So Roons, it has this open mint mechanic. It has these nice long ticker symbols, so you can have ridiculous ticker symbols. It has unique names like BRC20, but it's much more efficient than BRC20. So I kind of expect that it's going to be.

become the dominant fungible token standard. And then it will also become the dominant fungible token standard, I think, for all of these Bitcoin L2s. Yeah, I could totally see that happening. Like once a dominant token standard is kind of like, you know, cemented or it just gets the network effect early on, then it's like no one, you could design a different version of an ERC20 if you want, right? But like getting everyone to coordinate on that and what improvements are going to make? It's very hard. So once something gets cemented here, I expect it to. Has anybody ever done that? Has there ever been? There have been. There's tons. Yeah. Yeah. even different ERC standards that kind of like change.

ERC is at 721 that just modify a few different things. But like 1155 has made a go of it for NFTs, for example. But it's just really hard to unseat the just a simple, the maximally simple protocol design that just works. I guess a broader context question I want to ask you, Casey, as we look at this landscape. And I feel like you've opened the floodgates with ordinals to, more than just building on Bitcoin, right?

And more than kind of the social layer to just like what Bitcoin block space can do and how it can be expressed, all right? And so we're going to have NFTs. We have NFTs on Bitcoin. We're going to have more tokens on Bitcoin. We're going to have an entire, entire layer two ecosystems being built

to leverage Bitcoin block space. What do you think the implications of this are for the Bitcoin network? because like we've seen some of that play out in Ethereum, right? So like you mentioned earlier, this is, you know, joking like Bitcoin Stone Age, right? Well, it could get to like Bronze Age and then like industrial era really quickly. And that's going to have some implications because Bitcoin transactions,

transfers aren't going to be the only game in town when it comes to, it's going to have to compete against all the layer twos and all of the NFTs and all of the tokens for block space sales. And like, how does this, uh, How do you think this is, because this is almost like a zero to one moment for Bitcoin. It hasn't been used quite in this way. And like, what do you think the implications are going to be? I mean, my answer is probably going to be really boring.

Like, I think fees are going to get really high. I think it's launching on the halving. So we'll probably see like a thousand sat per V byte fees, which are like insane. If you look at what really has product market fit in cryptocurrency, I would say that the answer is fungible tokens, non-fungible tokens, a big subset of those fungible tokens. The subset of this fungible tokens is like memes and, you know, scams. And then also stable coins. Stable coins are a huge subset.

And then also defy, which more or less defy is like borrowing against your tokens and NFTs and ways of doing like, you know, more or less DFI. decentralized trading of those NFTs like Uniswap. So I think we'll probably see all of those things on Bitcoin. I think that's the endgame is like a really crazy, robust quote unquote Bitcoin finance ecosystem. But Casey, you're also going to see MV, like kind of like front running type of activity, I would expect. You're also going to see like people complaining that it costs too much to send Bitcoin. And I wish it was the good old days when it was like you're going to see some of the other things that you're seeing in more expressive blockchain networks like

Ethereum today, I would expect? So I don't necessarily think that we'll see much MEV. The MEV on Ethereum happens not just because people are using doing some kind of defy on Ethereum. It's also happening because of the way that Ethereum Dex's work. So when, you're a lot of, you go to execute a trade on uniswap, you are not executing that trade at a particular price, right? You're sending that transaction in the MEP pool and you're saying like, you know, whatever price I get, I want to trade these two assets. Whatever price I get, I'll take. Now, obviously, there are ways that you can limit your slippage and stuff like that, but more or less, that's how it works. And then this gives the minor the opportunity to insert new transactions or

reorder transactions relative to your transactions, like a sandwich attack where they buy the asset before you want to buy it, and then they sell it directly to you in your transaction. So I think it's going to be really hard to build a decks like that on Bitcoin. I don't know if it's possible. And if you have defy on Bitcoin, but it's in the UTXO model where you're actually specifying the specific price you want to get, and it's sort of fill or key. kill at that price, that doesn't necessarily mean that we just sort of open the gates towards arbitrary MEV, right? Let's say somebody's offering in a UTXO some amount of runes for sale and you make a transaction trying to buy those runes. If the miner creates a transaction that

buys that UTXO those runes and gets it into the block before you, your transaction is just invalid. It won't be mined and you won't pay any fees for it. So there's some sort of specific mechanisms to the way that Dex's work on Ethereum that are the source of MEV, and I think it would be hard to reproduce those mechanisms on Bitcoin. Currently, I don't see a lot of opportunities for MEV on Bitcoin with Roons. I could be wrong, but we might not ever see them in the same way that we do on Ethereum. I want to make sure that we pin down some of the parameters that make Roons work. You talked about, like, I think five or maybe six, just very.

low number of parameters that make a run a run. Can you talk about what those parameters are? What are when like a sum deployer of a run comes and they are presented with choices? What choices are they presented with? Yep. So they pick the run name, which is the uppercase characters A through Z between 1 and 26. There's actually a schedule where the short names are not available initially, from the halving to the next having, so over the course of those four years, the 12 character names and the 11th character names and the 10 character names, all the way down to the one character names, slowly unlock. I just kind of didn't want them to all get unlocked.

Yeah, exactly. Yep. So they start at 13 character names. So aside from that, you can set the spacers, which are not, don't change the uniqueness of a token, but let you put a little bullet character between spacers to make your ticker more readable. So if you want to have like Pepe Rune, you put a little spacer between Pepe and Rune. Then there is the divisibility. So how many places after the decimal point do you have subunits of this run?

Then there is a currency symbol, which is a single character. It can be any character, even like an emoji or whatever. that's the character that gets rendered after amounts of this run. Let's see what else. Then there is the pre-mine, so how much you're allocating in the initial transaction. Then a run may have terms. Terms specify the terms of the open mint. Let me actually get the code out, so I make sure that I don't miss anything.

Roonstone etching. divisibility, pre-mine, run, space, or symbol terms. Yeah, then you have terms. And then the terms are the amount that can be minted in every mint transaction. So every transaction after that can mint, you know, a thousand or a hundred or whatever the amount may be. It has a cap, which is the number of mint transactions that can happen. So if you want a supply of a million and you want a thousand per mint transaction,

you would have a 1,000 cap. Then there is a absolute block height start and end for the mint. So you can say the mint starts at this block, you know, block 1 million and goes to block 2 million. And then there is a relative block height start and end, which is relative to when the etching transaction is included. So you can say, I want this to be mintable for, you know, 100 blocks to start. minting after 100 blocks after it's etched and end 200 blocks after it's etched. So you can have a start and an end. And then there's a turbo flag, which you can set on the etching, which there's some features that we might want to add eventually that we don't think everybody is going to want.

So things that, for example, increase like client validation costs or simply things that are super degenerate. But we haven't, we didn't get them done in time for the protocol to launch. So if you set this turbo flag, you're opting in in the future to whatever preposterous ideas we have. So one is to have this like global lottery of ruins where every two weeks, everybody can buy lottery tickets with ruins and then get rewarded in their, in their ruin. One one lucky lottery winner at the end of the two weeks will win all of the runes. Like a lot of defy is just gambling with extra steps. So it seems like it would be a good idea to just do that at the protocol level. Just like, yo, bro, you can just roll the dice in the protocol.

But we didn't have that done initially. So the turbo flag is just opting into whatever non-specific weird upgrades we have in the future. And that's a run. That's everything that goes into a room. All right. So Casey, let's say I am Jeremy Aller from Circle, okay? So he's the CEO of Circle, which has the stable coin USDC. I want to have USDC. as a Roon token on Bitcoin. Like, how do I do that? What do I go do? How much does it cost?

Oh, it's cheap. And I would say, you know, I made this protocol for meme coins, but I think it's a really good protocol. It's very simple. Yeah, I was trying to legitimize our podcast here for, you know, for a second case. Yeah, yeah. Jeremy Oir, I would say, bro, it's a great choice. Welcome to Rooms.

So, yeah, he would download Bitcoin Core on his laptop. And then he would download Ord on his laptop and he'd let them both sync. And then he would create a new or. Ord wallet. He'd get some Bitcoin in that wallet, and he would do Ord wallet batch, and then the path to a Yemel file. He'd write this Yemel file with all the properties of the Rune. Probably if you're doing a stablecoin, what you would do is you can't go back and create new tokens in a rune later. The issuer, it's one and done. So he should just create more tokens than he'll ever need,

which he certainly can, like, you know, two to the 26 or whatever ridiculous amount of tokens, mint that to a wallet, and then have a service where people can deposit Bitcoin or deposit dollars with him, and he'll just send their Bitcoin address, the amount of runes backing those dollars. Like, he gives them, he gets $10, he sends them 10 runes. And then a redemption process where people can send him ruins, and he'll send them that number of dollars to their bank account. and then he's good. And he can reuse a lot of existing Bitcoin infrastructure for all of that.

The process of creating these transactions and signing these transactions and constructing these transactions is very similar to that of Bitcoin because they use normal Bitcoin transactions. So a lot of the, you know, any sort of Bitcoin signature, hardware wallets, et cetera, can all be used to do this stuff. In just a world of hyper-bitconization, I think we're setting ourselves. out for the perfect headline of Jeremy Aller minted 10 quadrillion tokens of Bitcoin Ordinals in order to do USDC on top of Bitcoin. But due to dollar hyperinflation, he ran out of

ordnals to actually issue dollars and has to deploy a new contract. Casey, is he going to have a fight to try to get his ticker? Like, they're going to be like squatters that's trying to get the USDC some derivative ticker. Oh, yeah, yeah, they'll be squatters. He's not going get the USC ticket. You can also create a, like, I actually think that for things like USDC, there's a way of minting a ruin where you don't actually pick a name and the name is just assigned to you sort of based on the block height and the transaction index where you created the ruin. And so then the name just winds up being this 27 character long thing that is really just like

a random identifier, right? So if you don't care about like the meme value of your ruin name, you can create these nameless runes that just get a name assigned by the system. And presumably he would do that. He could try to get some other name like USC, you know, Jeremy Aller, USDC. Real USC. Yeah. I guess it doesn't matter so much because it's just like a pointer in the database, right? And like maybe a front end will decide to render that differently. Like this is, you know, it's called whatever, like transaction ID, but it's actually USDC. Yep, that's right. Yeah, yeah. This was a huge, uh, contentious debate early when I was designing the protocol is should these ticker names be unique or not? Um, and so this was sort of the

compromise position that look, the names are unique. People are going to squat these names. People are saying to me like, oh, like what happens when somebody gets the Google ruin and it's not Google? And I was like, bro, this is not like NASDAQ, okay? Like, it doesn't matter if somebody gets the Google Rune. Google can just, like, if Google wants to runanize their stock, they can just pick whatever ticker and then tell people that they got their ticker. People don't even get their ticker names on the stock market. They have to do things like AAPL and like G-O-GL.

So, but what they can also do is they can get a token without a name that just has this long sort of system-generated name and just tell everybody, yeah, that's my room. That's the one, right? Yeah. Right, right. So what are going to be the first runes? I believe 10 runes have already been selected as the first 10 runes in the system. Can you tell us about this? Yeah, so I was originally going to select 10. The main reason being is that people have just been coming up with the most lame names. And I would be really upset if the first ruin had a lame name. So I had this plan to hardcode 10 runes in the protocol. After much going back and forth and juggling of spreadsheets, I was like, okay, I don't actually have 10. 10 good ideas for names. So I am just hard-coating the first one.

So that Roon Zero will be hard-coded, because I just don't want that to have a bad name or have it be fully pre-mined. So the first run is uncommon goods, like uncommon and then a bullet and then goods. It has no divisibility. So there's no subunits of this run. You can mint one per transaction.

So every time you mint it, you can get one unit of uncommon goods. and it is mintable between the halving block and the next having block. So for four years, anybody can mint it. So for four years, the ceiling price should be that of making a Bitcoin transaction. Because if the price got above that, then you would just do a Bitcoin transaction and mint more and then sell them. And then after that, I don't know. Well, in theory, unless there's more demand than what can be minted per 10 minutes.

one token per 10 minutes, right? Oh, no, no, no, no per transaction. Pro per transaction. Pro per transaction. So I think you can fit like... You can fit a lot. Okay. Yeah, yeah.

You could probably fit like a thousand or 10,000 per block. Yeah. So this... With no total cap, no constraint. No total cap. No total cap. This is almost like a test, right? It's almost like an OG meme coin.

So it's like, what is uncommon goods? What does that mean? Like what... Yeah, what's the reference? Nothing in particular. The ordinals, the trackable stats, they have rarity tiers. So the first set of, if it's not the first sat of the block, it's common or it's a trash sat. If it's the first sat of the block, it's uncommon.

If it's the first sat of the first block of the difficulty adjustment, then it's rare. It's the first set of the first block of the halving every four years. It's epic. And if it's the first set of the first block of a conjunction, which is every six halvings, the halving and the difficulty adjustment happen on the same block, it's legendary. So I just chose uncommon goods because people are already, you know, trading uncommon stats. So I thought that it would be a good sort of call back to that.

I love how this is like perfectly emblematic of Bitcoin culture of just like the longest term time horizons. What's the what's the phrase, Ryan? Low time preference. Where like Bitcoiners are making the number one tiered legendary like a rarity thing, something that happens once every six years. 36 years. 36 years. 36 years.

Yeah. The rarity curve is pretty brutal. Yeah. You guys are scarce. You guys do scarcity well. You guys love scarcity. You love scarcity. Okay.

What's the timeline for this, Casey? So when is Roon's going to be available for Jeremy Aller to go get his USDC shit coin? I assume he'll be first in line. So yeah. Jeremy Aller can start etching the U.S. DC Rune on April 19th, I think is the projected date of the Bitcoin having. Okay. Yeah.

Going live on the happening. Yeah. Going live on the happening. Okay. Yep. That's right. Yep. Yeah.

And then he can go mince some uncommon goods. I'm very curious what the dynamic with uncommon goods is. If people are just going to like every transaction, they're just going to mint one because like why not. Yeah. All right. So let's say again, I'm back to kind of dumb questions because that's mostly all I have, Casey. So, okay. So these tokens get minted.

let's say, like post-hapening, there's, you know, hundreds of tokens. We expect kind of like meme coin pickup because that's like, you know, pure product market fit for crypto these days for sure, right? So then where do I go to like trade these things? What's kind of the ecosystem that you expect to develop? Oh, it's not good, bro. It's not good. It's not good.

It's rough. All right. So I think there are some mostly like ordinals and inscriptions platforms that are that are setting up to do this. So I think it is X-Verse is one, and I think Magic Eden, I think, is another. So there are these ordinals and inscriptions like trading services. And I think they're also gearing up to start doing runes as well. So yeah, I think that's where you're going to buy and sell your spicy meme coins.

And am I going to be doing that on chain primarily? Or will there be, like, is there centralized? Is there like a coin base for runes? I guess Coinbase would have to sort of just support Roon tokens later, right? But when you're talking about me using Magic Eden to do a trade, that's all like kind of an on-chain transaction? Yeah, I think that Magic Eden and X-Verse are both non-custodial. You have like a, usually like a browser wallet that has your private keys.

And then you can offer bundles of Roons for sale and then accept these via those wallets. There's something called the PSBT, which is a partially signed Bitcoin transaction. So you, the seller, sort of create this partial transaction where you're saying, I want to sell these assets for this amount of Bitcoin, and they provide signatures for that, but it's not a complete transaction because it doesn't have enough Bitcoin on the inputs. And then the seller, takes that, the buyer, sorry, takes that partially signed transaction, completes it with their own signatures and however many Bitcoin the seller is asking for and broadcast that to the Mempool. So, Casey, let's fast forward a year here. So Roons has launched. People have digested them. There's been some sort of like equilibrium as has been emerged. What does this? What does Roons look like a year from now? Let's make some hypotheses about the future. I think probably between now and one year, some sort of like Skynet thing will have gone live on Rooms and we'll all be like fighting for our lives against killer robots. That's really the only way that I can see this. As a great Bitcoin answer to you.

him now. I don't know. I mean, like, I'm very, I was really surprised by the uptake of inscriptions, right? I had no idea what that would look like or how big that it would be or that there would be some sort of Bitcoin Renaissance because of that. Let's talk about that. So what did you think what happened with inscriptions and ordinals? And like, what did happen? I mean, easily nothing, right? Like, I was like, okay, this is like NFTs. I think this is a good, good NFT protocol. But will anybody use it. Like, I had no idea. I had no idea. And then, you know, I think one of the things that did happen, one of the reasons that made it so popular is because all of a sudden it changed the fee market. Like, fees went from being, like, blocks were not full. And so fees were the minimum of one

sat per V byte. And they suddenly got full. That served as this, like, advertisement for ordinals and inscriptions. Everybody was like, why are the fees high? And this was the answer. They're like, oh, ordinals and inscriptions. And then it also made a lot of maxis, really mad, like really, really mad. And they went on their podcasts and shook their fists at the heavens and talked about how mad they were. And then everybody was like, oh, shit, I guess I got to make some ordinals and inscriptions. So it could easily be the same with Roons or not. Like, it could be that, you know, okay, whatever, we just have a little bit of BRC 20 like mania. And then it sort of goes away. Or it could be like in a year, it could be like, okay, like people, somebody built a real

roll up on Bitcoin that works well. And now we have. these crazy off-chain, you know, defy markets for meme coins and stable coins on Bitcoin. It could really be anywhere between those two possibilities. Yeah. And the beautiful thing about both ordinals and ruins is that everything is on chain, right? Which is kind of like the first hurdle that must be overcome in order to be composable with other things that are also on chain. That's right. And to be composable with things that are off-chain, right? If you want to move something, from one L2 to another L2, it needs to be able to settle to the intermediate base layer, right? Yeah.

Totally. And going on in the Bitcoin world is this whole, like, Bitcoin Renaissance, where a lot of it is focused on layer two, as I say, but there's also Layer 1, Smart Contract Projects, optimistic roll-ups, ZK roll-ups that are, you know, still in development. But overall, like, for the first time, you're seeing a lot of parallel development, where, like, one person in Bitcoin is going one way. You know, Casey Rodhamor and Rooms is going a different way. but it's all recomposed back down to the layer one.

It's all happening in parallel. What about this whole movement around Bitcoin Renaissance have you enjoyed the most? Like which corners of it are you paying attention to? Which are any corners of it more exciting to you than others? Just overall, what do you like about the Bitcoin Renaissance movement? I just like that a lot of, I like the fact that there are a lot of soft fork proposals on deck that are kind of getting a lot of renewed attention. The sort of big soft work proposals are OpCat, which is, you know, pushing two bits of data together.

OpcTV, Opcheck template verify, which lets you sort of put conditions on how a UTXO is spent in the future, which actually winds up being really useful for a lot of L2s. What else? There's APO, any prev out, which lets you sort of rebind signatures to different transactions, which enables a potentially better lightning network. So I think maybe within a year, I think within a year we'll either have a soft fork activated or a soft fork that's really going through the final stages of being activated.

And I think that's maybe my favorite part about it, is that there's a lot of renewed interest in improving Bitcoin, the base layer, and it's looking like more realistic. Like there's a lot of discussion about it. Yeah, I think that's my favorite. Yeah, Casey, I'm wondering if maybe as we close this, you could give sort of like, maybe I'll try to articulate the pitch, and I'd love to hear your pitch. But it sounds like to Bitcoiners, to people who care about the Bitcoin network,

it's decentralization, sustainability, and Bitcoin the asset. Your pitch to them for like why Ordinals, Y Roons is you get to fix the fee market. So fee revenue goes up. That makes it more sustainable. It's also the gateway drug to buying, you know, Bitcoin, right? So they start with Dgen coins and they kind of like, oh, you know, I lost 90% that cycle. And their low time preference kicks in and next time they buy Bitcoin. And then I guess you're making building on Bitcoin cool again, right?

And like you've brought, I think through this entrance point, a lot of capital to the space. I guess for the rest of crypto, you're sort of saying like, hey, Bitcoin can be a settlement layer as well for valuable, like, you know, transactions, right? in a similar way that Ethereum has been. Do you have any pitch to kind of the maxi crowd? Or are they like, do you even need to win them over? Do they even matter? They don't. I really wish that they would, I don't want them to like inscriptions or runes,

but I do think that they shouldn't care. I think that Bitcoin is money for enemies, right? It's not a system so that everybody can hold their hand, and go in a circle and sing kumbaya, it's a system so that everybody can transact and do what they want and not be interfered with by anybody else. And so I would say that, you know, the really the consistent attitude to being a Bitcoin maxi and inscriptions and ordinals and ruins is like, I think it's dumb, but it doesn't matter. And it's, it doesn't change the security properties of Bitcoin. So whatever. Like people can just do these stupid things. And that's totally fine.

That's where I would like to see the Bitcoin Maxis got. Yeah. The Bitcoin protocol is indifferent to ordinals and ruins. And therefore, so should the Maxis. Yeah, pretty much. Yeah, absolutely. Yeah. That says it. Says it great. Okay. See, this has been great. Thank you so much. Very excited about the launch on the happening day, which is hopefully this week. And yeah, we'll see where this goes. Maybe. Before we end, I've got. I've got to shill my podcast because my co-host would absolutely murder me if I didn't. I have a podcast that's called the Hell Money podcast. Hell.money is the URL.

It's on YouTube and whatever fine podcasts are sold. It's on video. Bitcoin, inscriptions, ordinals, runes, politics, technology, lots of Bitcoin 101 type content. My co-host, her name is Aaron. we also dress up in fabulous costumes. So the last one you can see we dressed up in Viking costumes and explained how. On the flavor of like Bitcoiner costumes to Ethereum costumes, where are we on this spectrum? Not unicorns, more Vikings, I think.

Not unicorns and animals. No, well, I like the costumes that are the stupidest. You know, like I like looking dumb because I think it's funny. All right. So pretty far into the Ethereum for the universe of costumes. Yeah, yeah, very much. Aaron, she likes looking hot. So she's not into that.

But I like looking dumb. Yeah. She's on the Bitcoin side. I'm on the Ethereum side. Okay. We'll include a link to that guy. So make sure you check that out. It sounds incredibly entertaining.

And like the broader context, Casey, is like you haven't launched. This is not like a big VC backed, you know, $10 million thing. No. It's kind of you plus another guy. Is that? Yeah, it's me and me and Raf Jaff. We wrote all of it. You getting paid for this?

Me? No. Raff gets paid from. No one's paying Casey. He's wrong. He's paying me. Yeah. Yeah.

So Raff gets paid. We set up a nonprofit that all it does is funds Raff and funds the servers. I don't get paid. Yeah. So it's no VC back. There's no VC money. VCs come to me crying, begging. What can I invest?

Let me please. Yeah. And the real reason I don't is that there's no good way to monetize it without making it worse. You know, there's, there's, There's no native token. There's no way that I collect fees on anything. It makes it very low friction. You know, you don't need to interact.

You need Bitcoin in your wallet to use it, and that's it. All of those reasons haven't stopped other people, though, Casey. They sure haven't. Boy, haven't there. Yeah, yeah, yeah. I don't know. Maybe one day I'll turn evil and, like, the hex guy will pay me like a fancy watch. And I'll be like, all right, it's ruins Bitcoin hex now.

we've rebranded on the Tron network or something, but today is not that day. Not today. All right. Well, that's very bit-cominer of you, Casey, and I mean that in the best of ways. This has been an absolute blast. Thank you so much. Thanks for having you guys. It was great.

Bankless station, got to end with this. Of course, crypto is risky. You could lose what you put in, but we are headed west. This is the frontier, and we're on the frontier of the frontier with Bitcoin. It's not for everyone, but we're glad you're with us in the bankless journey. Thanks a lot.