What Are Bitcoin Runes and Why Is Everyone Talking About Them?

With Runes, Casey Rodarmor is aiming to “make Bitcoin fun again.” Here’s how they work.

Apr 19, 2024

What Is Btc Runes Kv

Key Takeaways:

  • Due to BRC-20’s existing shortcomings, the creator of the protocol proposed Runes in September 2023. It aims to be a UTXO-based fungible token protocol.
  • Ordinals are a way to attach information like pictures, text, or videos to a Satoshi, the atomic unit of Bitcoin. They enable the creation of Bitcoin NFTs.
  • Ordinals have sparked debates amongst the community. Supporters believe the protocol has expanded the use cases of Bitcoin. Yet, it also made Bitcoin deviate from its original purpose as a peer-to-peer system of money transfer.
  • By being UTXO-based, Runes is more compatible with Bitcoin’s native model and expected to reduce ‘junk’ UTXO creation and the on-chain footprint, plus promote better user experience. 
  • Runes launched during the upcoming Bitcoin halving on 20 April 2024.
  • There are already protocols and NFT projects launched that leverage Runes’ potential, showcasing how Runes have created excitement in the community.

What Are Bitcoin Runes?

Runes protocol was proposed by Casey Rodarmor, the creator of the Ordinals protocol, in a blog post published in September 2023. It aims to be a UTXO-based fungible token protocol, which allows the issuance and management of tokens on the Bitcoin network.

“Creating a good fungible token protocol for Bitcoin might bring significant transaction fee revenue, developer mindshare and users to Bitcoin,” Rodarmor wrote in the same blog post. Runes launched at the time of Bitcoin halving (840,000 blocks) on 20 April 2024.

For a deep dive in Bitcoin protocols, read the full Research report on Runes and Ordinals.

How Do Bitcoin Runes Work?

The Runes protocol issues and tracks tokens using UTXO, which is also the native model of Bitcoin used in tracking transactions on the network. This is in contrast to BRC-20, which adopts the account model and is not compatible with Bitcoin’s standard, hence requiring the use of centralised indexers. From this point of view, Runes protocol is more native and decentralised. 

In addition, balances of runes are directly held by UTXOs, and a UTXO can hold any amount of runes. With Runes, no ‘junk’ UTXOs are created, and the mechanism is more efficient and reduces the on-chain footprint. 

Transactions are marked in protocol messages using OP_RETURN followed by a data push of uppercase letter R. Issuance or transfer transactions are specified in the subsequent data push. Invalid protocol messages will result in the burning of Runes.

  • OP_RETURN is a script opcode in the Bitcoin network that marks a transaction output as invalid and is provably unspendable. Moreover, it allows storage of 80 bytes of data in transaction output.
  • Data push is the way to add data to a transaction’s script, which specifies how to process the transaction.

The figure below illustrates how the Runes protocol would work for issuance and transfer transactions:

  • Transfer is specified by the first data push in a protocol message, which would assign runes from the original source to one or more new UTXOs. 
  • Issuance is specified by the second data push. The token supply will be assigned to a UTXO.

Why Were Bitcoin Runes Created?

Runes were created to alleviate and improve on some of the weaknesses its predecessor protocols — namely Ordinals and BRC-20 — exhibited. You can find a deep dive into how they work and led to the creation of Runes in our-depth report on Bitcoin Ordinals and Runes.

Here, we’ll focus just on the pros and cons of the Runes evolution:


  • Interoperability with Bitcoin’s architecture: Runes’ UTXO-based model integrates well with the native Bitcoin architecture, which enhances security. In addition, UTXO enables Runes to be compatible with the Lightning Network, expanding its potential use cases.
  • Better UTXO management: Runes’ UTXO-based model improves compatibility, hence reducing blockchain bloat and on-chain footprint. Moreover, Runes was designed with responsible token management in mind, where invalid messages would result in the burning of runes.
  • Simpler user experience: Runes is designed to operate without the need for off-chain data or native tokens. This is different from other protocols; for example, RGB requires off-chain data, and BRC-20 requires the use of ordinary theory for certain operations. 


  • Require BRC-20 users to re-adapt: Despite having the same developer as the Ordinal theory, Runes’ design approach is quite different from BRC-20. It is uncertain whether BRC-20’s current acceptance, from both users’ and developers’ points of view, will extend to Runes.
  • Lack of standard framework: There wasn’t a clear technical framework when Runes was first proposed. Since then, there has been a rise of protocols launched (not related to Casey Rodarmor), which include Pipe (a separate UTXO protocol inspired by Runes), as well as RSIC and Runestone (Bitcoin NFT ‘rune’ projects). Though these projects have attracted market attention, they also reflect potential divergence in the Runes ecosystem.

Bitcoin Runes vs Other Bitcoin Projects

Both Runes and ARC-20 are developed to address some limitations of BRC-20 due to its account-based model. 

The table below summarises the pros and cons of all three protocols: 

When Were Bitcoin Runes Launched?

Runes launched during the Bitcoin halving on 20 April 2024, and within two days of launch, almost 7,000 Runes were minted. Even before the official launch, the project already created great interest and spin-off projects in the community based on the appeal of Casey Rodarmor and the Ordinals team’s work. 

How Can You Buy Runes?

Rodarmor mentioned that the first 10 Runes would be deployed with fair and open mints, and started a poll to collect name suggestions in February 2024. The token names are 12 characters or more during the initial launch; gradually, shorter ones will be unlocked where projects would have to pay fees to acquire these names.

Various projects were already launched with linkage to the Runes protocol, showing the community’s excitement to build on the protocol.


Inspired by Runes and BRC-20, Pipe is a UTXO-based token protocol launched on Bitcoin in September 2023. Created by BennyTheDev, the creator of Tap protocol (Bitcoin Ordinals protocol supporting OrdFi), Pipe enables users to deploy, mint, and transfer tokens on the Bitcoin network. 

It aims to improve upon Runes by providing fair minting (equal chance to acquire tokens). $PIPE was the first token launched on Pipe. 

Rune-Specific Inscription Circuit (RSIC)

RSIC Metaprotocol is a project combining Ordinals with yield farming, consisting of 21,000 Bitcoin NFTs featuring runic symbols, with 90% of the NFTs airdropped to selected active Ordinals wallet addresses in January 2024. 

After activation, NFT holders can earn ‘runes’ (token issued on Runes protocol;  note that it is not an official token launched by Casey Rodarmor). At the time of writing, RSIC has a floor price of 0.089 BTC.


Runestone is an NFT project led by the founder of ord.io platform (@LeonidasNFT). In March 2024, Runestones were airdropped to Bitcoin addresses holding three or more non-text inscriptions before block height 826,600 (one-year anniversary of Ordinals). 

Prior to the airdrop, Runestone #63,140,674 was auctioned for ~8 BTC (US$544,000 based on price during the auction). Similar to RSIC, Leonidas mentioned that Runestone would be “converted” into a token launched on the Runes protocol.

At the time of writing, there are 112,384 Runestones, with a floor price of 0.058 BTC and a total transaction volume of 24 BTC.

Conclusion — Are Runes the Next Big Thing for Bitcoin?

Ordinals represent a significant development in the Bitcoin ecosystem. They created additional utility on the Bitcoin network by enabling the creation of NFTs and tokens. The BRC-20 token standard was a key driver for the Ordinals protocol, and since its launch, has laid the foundation for the development of more tools and infrastructure (e.g., wallets, competitor protocols). 

However, Ordinals and BRC-20 also received a fair amount of controversy. Part of the community believes Ordinals has caused Bitcoin to deviate from its intended purpose as a peer-to-peer transfer mechanism. They have also caused network congestion and given rise to the Runes protocol, which aims to resolve that. 

The community is excited about the protocol, as demonstrated by emerging protocols inspired by Runes and the almost 7,000 Runes that were minted within two days of launch.

With these developments from Ordinals, BRC-20, and subsequently Runes, we have seen continuous innovation in the Bitcoin ecosystem, and the potential to, as Casey Rodarmor puts it, “make Bitcoin fun again.”

Due Diligence and Do Your Own Research

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