Definition
Runes is a protocol for issuing fungible tokens on Bitcoin, designed by Ordinals creator Casey Rodarmor and launched at the April 2024 halving. Unlike BRC-20, which inscribes JSON onto individual satoshis, Runes works natively with Bitcoin's unspent transaction output (UTXO) model and encodes token data in an OP_RETURN output. Rodarmor's stated goal was a simpler protocol with a minimal on-chain footprint and more responsible UTXO management, reducing the "junk" UTXOs that earlier token schemes tended to create.
How balances are tracked
A Rune balance is associated with a UTXO. When that UTXO is spent, an OP_RETURN message (a "runestone") specifies how the tokens are split among the transaction's outputs. Because the protocol leans on mechanisms Bitcoin already supports, it requires no consensus change and no separate sidechain.
A neutral view
Token activity on the base chain remains contested. Proponents value Bitcoin's permissionless settlement; others worry about block-space competition with monetary transactions. D-Central does not advocate for or against issuing tokens, but operators should recognize that Runes minting events, like inscription waves, can raise fees and reshape the mempool in ways that affect mining economics.
Runes sits in the same family of base-layer metaprotocols as Ordinals and Inscriptions. For the canonical specification, consult the protocol's own documentation.
In Simple Terms
Runes is a protocol for issuing fungible tokens on Bitcoin, designed by Ordinals creator Casey Rodarmor and launched at the April 2024 halving. Unlike BRC-20,…