Bitcoin Runes - Bitcoin Runes is kind of a new token standard in the Bitcoin ecosystem. In simple terms, Bitcoin Runes are a new token standard for creating fungible tokens on Bitcoin.
The protocol was introduced last September by Bitcoin developer Casey Rodarmor, the creator of the Bitcoin Ordinals. Runes improves fungible tokens on Bitcoin. One of their benefits is that they increase Bitcoin’s appeal and could onboard millions to the network. Runes make it easier to create memecoins and other community-based projects on Bitcoin. There are already lots of memecoin projects on the Runes train.
In addition, the Bitcoin Rune inherits some of the native features of the Bitcoin chain, including its security. However, it is important to proceed with caution as Runes are still in their early stages.
Runes is different from other Bitcoin tokens standarts because it doesn't use a native token or off-chain data. It's a UTXO-based model that uses unspent transaction outputs (UTXOs) to track the Runes balance. Each transfer transaction is split into different UTXOs, each holding a different amount of Runes.
The Runes protocol’s launch on the Bitcoin mainnet on April 20, 2024.
Runes come into existence by being etched. Etching creates a rune and sets its properties. Once set, these properties are immutable, even to its etcher.
Rune protocol messages, called runestones, are stored in Bitcoin transaction outputs.
A runestone output's script pubkey begins with an OP_RETURN, followed by OP_13, followed by zero or more data pushes. These data pushes are concatenated and decoded into a sequence of 128-bit integers, and finally parsed into a runestone.
A transaction may have at most one runestone.
A runestone may etch a new rune, mint an existing rune, and transfer runes from a transaction's inputs to its outputs.
A transaction output may hold balances of any number of runes.
Runes are identified by IDs, which consist of the block in which a rune was etched and the index of the etching transaction within that block, represented in text as BLOCK:TX. For example, the ID of the rune etched in the 20th transaction of the 500th block is 500:20.