What are Bitcoin Runes?
A way to make tradable tokens on Bitcoin itself, storing their data in OP_RETURN outputs. Each token is an entry in a transaction, not a separate coin.
Runes is a 2024 protocol for issuing and swapping tokens on Bitcoin: the creation and transfers of a token live in ordinary transactions' OP_RETURNOP_RETURNA payment output that stores data instead of paying someone. It can never be spent, so nodes don't track it as spendable. data. Wallets and indexers that understand the protocol read those records to track balances.
Unlike an inscriptionInscription (ordinals)Data, such as an image, written into a Taproot payment's witness and tied to one satoshi, so it lives on the blockchain., which attaches data to one satoshi, a rune behaves more like a balance entry. Neither is bitcoin itself — they ride on Bitcoin's block space, and they can raise the fees everyone pays when demand spikes.
References
- Ordinals, “Runes”.