Bitcoin Runes

tl;dr: Bitcoin Runes are fungible tokens on Bitcoin, similar to ERC-20 tokens on Ethereum.

Overview

Runes are a protocol for fungible tokens on Bitcoin created by Casey Rodarmor, who launched the Bitcoin Ordinals protocol for non-fungible tokens (NFTs) in early 2023. Runes are the next evolution of the BRC-20 fungible token standard originally built on top of Ordinals.

By using Bitcoin's UTXO model and the OP_RETURN opcode, Runes improve Bitcoin's efficiency around fungible tokens as well as simplify their creation and management.

Similar to ERC-20 tokens on Ethereum, Runes can be used for different purposes. Currently, they're most often used for memecoins like Billy 😼

Bitcoin Ordinals & BRC-20

The Bitcoin Ordinals protocol enabled inscribing data, often images, onto individual satoshis on Bitcoin. This allowed for the creation of NFTs on Bitcoin.

BRC-20 is a fungible token standard built on top of Ordinals.

Runes were created to address some key inefficiencies with BRC-20s such as data bloat, incompatibility with Bitcoin Layer 2 solutions, and extra transactions to transfer BRC-20s.

Details

Want more? Read the Runes technical specifications.