I had dinner with friends last night and opened the Pandora box to the question what is cryptocurrency? I started by pointing out the Bitcoins UTXO model compared to the Ethereum account-based model. I used the classic analogy of cash and bank accounts. That the receiving address for Bitcoin has access to a list of unspent transaction outputs and that there are 21 million in total on the Bitcoin blockchain. (Personal note I try to spread my addresses out ie not use the same address twice which curtain application, wallets better to call them have implemented under the hood.) Compared to ETH which has an account that can access fungible tokens from a smart contract or in NFT's case, Non Fungible Tokens.

My friend asked what are these tokens and I replied they are simply values as is the case for NFTs. I then go on to explain that these values have prices on them which can be traded depending on the denomination to which the buyer and seller agree hence the marketplace. This is when I couldn't catch myself to continue about the recent development which is Runes. Runes are another doc stacked on top of BTC that identifies individual sats and inscribes on them divisibility, names that are only the alphabet, and a currency symbol that can be reused for other parameters. Then that's when my friend yawnd and realized I was boring him so came home and wrote this blog.

I had dinner with friends last night and opened the Pandora box to the question what is cryptocurrency? I started by pointing out the Bitcoins UTXO model compared to the Ethereum account-based model. I used the classic analogy of cash and bank accounts. That the receiving address for Bitcoin has access to a list of unspent transaction outputs and that there are 21 million in total on the Bitcoin blockchain. (Personal note I try to spread my addresses out ie not use the same address twice which curtain application, wallets better to call them have implemented under the hood.) Compared to ETH which has an account that can access fungible tokens from a smart contract or in NFT's case, Non Fungible Tokens.

My friend asked what are these tokens and I replied they are simply values as is the case for NFTs. I then go on to explain that these values have prices on them which can be traded depending on the denomination to which the buyer and seller agree hence the marketplace. This is when I couldn't catch myself to continue about the recent development which is Runes. Runes are another doc stacked on top of BTC that identifies individual sats and inscribes on them divisibility, names that are only the alphabet, and a currency symbol that can be reused for other parameters. Then that's when my friend yawnd and realized I was boring him so came home and wrote this blog.