Dialogue with Ordinals' Father Casey: Only "gamble" with small positions, use the rest to buy Bitcoin

Interview: DUDU (PukeCastCN), Jasmine (Runes Chinese Community)

Compiled by: Jaleel, BlockBeats

Editor’s Note: As a programmer and Bitcoin developer, Casey Rodarmor (@rodarmor) created the Ordinals protocol and the Runes protocol over two years. By developing the Ordinals protocol, Casey provided a new way to directly store and transfer non-monetary data (such as digital artworks) on the Bitcoin blockchain, making it fair to say that without Casey, there would be no Bitcoin ecosystem.

Casey shares at the Ordinals Asia event in Hong Kong

Before the launch of Runes, Casey jokingly said that if "the market cap of the Runes ecosystem does not reach $1 billion within a month of its launch, he would prepare to commit seppuku." Although the target was briefly met, the market cap did not reach the goal a month later. How did Casey respond to this joke? The Bitcoin ecosystem conference two weeks ago in Hong Kong was very lively; what were Casey's feelings about being in Hong Kong? Jasmine, one of the creators of the Runes Chinese community, and DUDU from PukeCastCN talked with Casey in a Space yesterday.

BlockBeats now compiles the interview content as follows, with some parts omitted.

DUDU: The Bitcoin week in Hong Kong was very lively two weeks ago. What are your thoughts on it? I heard that many people got sick from having too much fun.

Casey: Yes, I took a break for a week and a half, but I'm much better now. The Bitcoin market in Hong Kong is just crazy. There is a big difference between players from the West and the East. Chinese people really love to gamble and have a huge enthusiasm for Runes and meme coins. I think this is much better than many Western meme coin enthusiasts who always pretend to be pursuing some future finance, even talking about banking Africa. The market here is more pure and honest; everyone is talking about how to make a lot of money.

DUDU: The Rune protocol has been launched for a month now. How do you feel about the first month? Is there anything particularly surprising or noteworthy?

Casey: There were no surprises, which is fortunate. My main concern was bugs in the protocol. If there were protocol-level bugs that disrupted the balance of Runes or affected minting or transfers, that would be bad. But so far, everything has gone smoothly, and there are no protocol-level bugs. There was a small bug in ord (a reference implementation of Runes), which is unfortunate, but not a big issue. I'm glad I was able to fix that bug in time.

I think it’s predictable that after Runes was launched, many people would be disappointed because it was hyped up a lot, with everyone saying "these things are going to take off, to the moon." But that’s not the case. When a technology is first launched, it is in its worst state. The ecosystem support is poor, the tools are incomplete, and the trading platforms are also lacking. I think it’s natural to see some disappointment.

I don’t know how the price and popularity of Runes will develop; I don’t make predictions. The only investment I’ve made that has made money is Bitcoin, and my wisdom as an investor is very limited. I really don’t know what will happen. What’s pleasant is that those integrating Runes have told me that it’s much easier than integrating BRC-20, which makes sense. The protocol is simpler, especially when you’re doing anything with BRC-20, like creating an inscription and then possibly transferring it. Transferring a BRC-20 requires three transactions, which is quite a lot. Transferring Runes only requires one transaction.

I think the technical advantages of Runes in terms of simplicity and efficiency have already become apparent. It has always been simple and efficient, and those integrating Runes say the same, which is great. I don’t know what the future holds for Runes; it’s hard to say. On Ethereum, there are decentralized trading platforms where people can conduct various trades on-chain, like trading Runes or BRC-20. Bitcoin doesn’t have these. Solana has zero-second transaction times, while Bitcoin does not. I think it remains to be seen what kind of market Runes will occupy in the future. For me, the first month has been great, and everything is going according to plan.

Image source: Ordinals summit 2023

Jasmine: You have emphasized that Runes is built for Memecoin; it’s not about technology but more about socializing, gambling, and entertainment, to attract more people from other ecosystems to pay attention to the Bitcoin ecosystem and ultimately use Bitcoin. Runes has indeed attracted a lot of attention and participation from other ecosystems. As of now, there are over 70,000 Runes tokens, mostly Memecoins. So where do you think the next breakthroughs in the Runes ecosystem might occur? What should builders focus on? For example, building applications that make interstellar casinos more interesting? Or something else?

Casey: Regarding future protocol development, there aren’t too many plans. There are some small things. For example, one possibility is to allow people to create Runes, where the creator of the Rune is the only one who can mint it. This is part of future protocol development. Protocol development is very tricky. For example, people want something like decentralized trading platforms (dexes), like a Rune version of Uniswap on Bitcoin.

However, the problem is that if you design the protocol poorly, you might introduce something called MEV (Miner Extractable Value). Things like Uniswap allow Ethereum miners or validators to insert their own transactions and reorder transactions to profit from user trades. For example, if you send a buy transaction, the miner can buy before you, ensuring that you are buying from the miner. This is not just about miners sacrificing user interests for profit; it can also lead to miner centralization because miners must invest in very complex infrastructure to be competitive. This means miners can no longer just plug in hardware and start mining; they have to do a lot of other work, which will centralize miners. The core value proposition of Bitcoin is decentralization. I want to improve the protocol, but I will not add anything that leads to the centralization of Bitcoin miners; that’s very tricky.

For those building on Runes, my advice is that you must make things interesting. If you don’t have a decentralized trading platform like Ethereum or instant transaction confirmations like Solana, you can only focus on making things fun, which is a high requirement. It’s difficult. You have to make your interface interesting. You have to make your community interesting. You have to make any mechanisms you introduce interesting.

But I think what people should really focus on is fun, thinking about how to build the best possible casino. Runes are built for meme coins and junk coins, but it’s a good protocol. There’s nothing at the protocol level preventing people from doing "serious things" with it. I’m very skeptical about only doing serious things; many protocols are just scams, and they don’t do what they claim, so don’t do that. But if there’s enough interest, like a stablecoin on Runes that is one-to-one backed by the dollar or other currencies, I wouldn’t be surprised; let’s all pray for the development of L2.

99% of Layer 2 Protocols are Junk?

DUDU: Are you optimistic about Bitcoin Layer 2? Why?

Casey: I don’t know if I would say I’m optimistic about Layer 2. The problem is that, as far as I know, no one has developed a truly effective Layer 2 yet. Many people have ideas. Even if they have a beautiful white paper, you have to look at it with skepticism. Over the past 10 years, thousands of white papers have been published, but 99.999% are junk, complete junk. You have to wait until someone builds something effective before you can see the characteristics of the system when it exists.

For example, if you look at the Lightning Network, the Lightning Network is great. I love the Lightning Network, but it has some practical drawbacks and operational hassles. Keeping channels open is difficult, and there are all sorts of complex attacks to worry about. We haven’t seen the widespread adoption of mobile wallets for the Lightning Network, which can pair with anyone and open channels with anyone. Currently, the Lightning Network wallets that work on mobile are those that open channels with specific Lightning service providers. If you just read the white paper for the Lightning Network, it’s hard to predict all these different difficulties.

My attitude towards Layer 2 is "seeing is believing." So rather than being optimistic, I’m more in a wait-and-see state. I personally rely on L2 developers. When people create L2 on Bitcoin, they can add anything they want on L2, and if they are careful, it won’t lead to MEV or centralization at the base layer. This is what I expect; I’m counting on the development of L2. If L2 has this transaction or other features, people can transfer Runes to L2, do anything on L2, and then settle back to the main chain; this is the future functionality I hope for.

Jasmine: Previously, you mentioned in a tweet that you would rather invest in some centralized service projects than certain Layer 2s. I want to ask about your views on decentralization. Is decentralization really that important in all these ecosystems?

Casey: First, it’s important to clarify that decentralization is the best, followed by centralized services that can fulfill their promises. If decentralization is not possible, then it’s acceptable if centralized services can operate normally. In market competition, good services will survive, and poor services will be eliminated. This is also true in competition among centralized services. The worst situation is those that claim to be decentralized but are actually centralized or simply do not work. My comments are actually aimed at those investing in decentralized projects that fundamentally cannot operate or are just using excuses to issue tokens and then sell them off. So I prefer to invest in truly effective decentralized projects, but many of the investments I see today are flowing into decentralized projects that are unlikely to succeed.

If people must choose between a decentralized project that is doomed to fail and a centralized service that can provide useful services, I would prefer people to invest in a centralized service that can actually fulfill its promises. For example, in the U.S., the best centralized service platform for buying Bitcoin might be River. It’s a very simple Bitcoin financial service platform where you can buy Bitcoin, transfer it, and so on. I think it would be great if every country had one or two companies like River, providing people with a safe and simple way to acquire Bitcoin. I would rather see that than a bunch of Layer 2s that will never work. So it’s not about comparing centralization with decentralization, but rather comparing centralization with fake decentralization. In this case, I will always choose a functional centralized alternative. I would like to see some very good centralized exchanges that focus solely on Bitcoin or Runes, listing every Rune. I think that would be very interesting and would fill a gap in the ecosystem.

DUDU: BRC-20 has added new features for new tokens, such as the ability to increase or decrease new tokens. But there is no such feature in Runes. Stablecoins are a very important feature in Bitcoin. For example, there are such features in Ethereum or Solana. But Runes does not have such features. What are your thoughts on stablecoins in Runes? Are you aware of any projects related to stablecoins in Runes?

Casey: Sure, I would categorize stablecoins into three types.

First, I do not agree with stablecoins that attempt to be supported by project utility tokens; that’s a bad idea, and those schemes always collapse. Terra’s Luna is one such algorithmic stablecoin. Currently, I seem to have seen a similar project called DUCAT, which I do not endorse. I read their white paper, and it’s very complicated. I don’t believe that everything they are doing will work. We’ll see.

Another type of stablecoin is to create a synthetic coin. Essentially, the simplest stablecoin is that you buy dollars. For example, you get dollars. You have this token, and people can buy tokens from you at a price of $1 per token, or they can redeem at $1 per token. If you give them a token, you would send one dollar to their bank account. This is the simplest and safest stablecoin. Tether and USDC are such stablecoins. I haven’t heard of anyone trying to establish such a stablecoin on Runes. These types of projects are usually very complex. You have to have banking relationships, etc.

Then there’s another type of stablecoin where you try to create a synthetic stablecoin through trading parties. You let people deposit Bitcoin into your bank account, and then you go long on Bitcoin, so the price of Bitcoin goes up. You sell put or call options on Bitcoin. If the price of Bitcoin goes up, you make money. Then you also short Bitcoin, so if the price of Bitcoin goes down, you also make money. This is somewhat like delta-neutral hedging. Regardless of whether the price goes up or down, your value remains at the same dollar amount.

I’ve heard of several projects trying to establish stablecoins based on this model. This isn’t as crazy as completely synthetic stablecoins, as the latter tries to create value from nothing. I think neither of these has reached a practically viable state; they haven’t made this public; they’re just saying privately, "Oh hey, we’re looking into this."

DUDU: You have mentioned OP-CAT multiple times. Can you elaborate on why you are optimistic about OP-CAT?

Casey: I like OPCAT. OPCAT seems to be a very powerful opcode that adds many missing features to Bitcoin. Overall, as long as the opcodes are reasonable and not crazy, I’m willing to accept them. Personally, I hope to see OP_CTV, which is a contract opcode. Even crazier things, like great script recovery, would also be cool.

I’m not a researcher and don’t have deep insights. This is just my off-the-cuff opinion. I think it’s too early to say what will ultimately happen. I like OPCAT, but some people talk about OPCAT as if it’s inevitable. Some people on Twitter say anonymously, "Like it or not, OP_CAT will happen." I think the reality is that this is actually very uncertain until people really try to activate something, and no one has done that yet.

Note: OP_CAT is a potentially implementable opcode that can help Bitcoin achieve smart contract functionality.

"Have Fun, Buy Bitcoin"

DUDU: Can you share more information about the Fun Collection? I see you often post about it on your social media. Do you have any further plans for when to release it?

Casey: Fun is a collection of photos taken by my friend Parker Day, and we have been collaborating on it. She started this project two years ago. While she was starting to shoot and do all the actual work, I was researching ordinals and what later became inscriptions. We didn’t know exactly how we would sell them, but it turned out that by the time we finished them, ordinals and inscriptions had become popular enough that it actually made sense to put them on Bitcoin as inscriptions. So, it’s a collection of 1,000 photos shot on film. No Photoshop, just makeup and hairstyling, no special effects.

Fun Collection

Actually, I just finished all the inscriptions today, which took a long time. I had to write a program to wait for low fees before inscribing. So, I finally inscribed all 1,000 photos. That’s a lot. I think the total size is 100 megabytes. So, that’s 25 full blocks of inscriptions. Yes, there is currently no specific release plan. We will sell them in some way, but I’m not sure how yet. However, I’m very satisfied with this collection. I think it could be the most expensive portfolio because it’s all shot on film, with models and makeup artists. It might also be the most expensive inscription collection. 97 megabytes of data is no joke. So, it’s a great collection. I don’t know if I would recommend others to buy it. I don’t give investment advice, but the art is very good. So, I’m glad it’s on-chain.

Although this kind of art isn’t for everyone, that’s Parker’s style. She launched a series of portraits called "Icons" in 2017, which was her breakthrough work, with a similar style. I think it fits very well with NFTs because profile picture collections (PFP) are very popular. I think it’s the closest it gets to a PFP. What would things like Board Ape Yacht Club or Crypto Punks look like in real life? They are colorful and very strange. I think if it’s not strange, it’s a bit boring. I don’t want to create another collection of 10,000 images made up of digital ones. If it’s not strange, it’s not worth doing. That’s not very interesting. I would encourage people to start browsing these images. There are some strange details. Some may not be to their taste. There are some sexy girls in there. Those aren’t so weird. And there are a few photos of cats. Take a closer look and see if there’s something you like.

Jasmine: You previously joked that if the Runes protocol did not reach a market cap of $1 billion within a month, you would commit seppuku. What do you want to say about that joke? Or do you want to set another goal today?

Casey: Absolutely not, I will never make price predictions again. Given the last goal, we did not achieve it. I remember on May 20, our market cap was $999 million. It did exceed $1 billion in the month prior. But the rule is what the price is a month later. A month later, the total market cap of Runes was not $1 billion, so you are now talking to Casey’s "soul."

Runes market cap data, image source: GeniiData

DUDU: Finally, please share any thoughts you have on the Bitcoin ecosystem.

Casey: It’s great to see a group of dgens in Hong Kong. As for what I want to say in the end, it’s to buy Bitcoin. Runes and Ordinals are a fun form of speculation, but nothing can really compare to Bitcoin. It is the hardest currency we have ever had.

If you look at the history of fiat currencies, the lifespan of fiat currencies is at most 100 years. They all perish, get devalued, and fall apart. We can see that even the seemingly strong dollar is experiencing inflation that is happening faster and faster. So I would say buy Bitcoin, and only use a small portion of your savings to play with Runes and Ordinals gambling. But whatever else you want to do, definitely don’t buy venture capital mined coins; there’s no reason to buy pre-mined coins. Creating coins doesn’t require any cost, especially Runes, you can just click a mouse to issue a coin.

I do not tolerate venture capital mined coins; play with a small portion of your funds for gambling. But for the rest, buy Bitcoin. As I said, this is the only investment I’ve made money from. I still have a lot of confidence in it. Before Bitcoin reaches the market cap of gold, we have about ten times the growth potential. I think that could happen. Bitcoin is much better than gold, and you can transfer it to the other side of the Earth in ten minutes.

So that’s what I want to say in the end: have fun, buy Bitcoin.