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Author: Admin | 2025-04-28
Runes is a Bitcoin native token protocol that empowers issuers to create and manage their own tokens directly on the Bitcoin blockchain. This capability adds utility to the Bitcoin protocol, and if widely adopted, could increase the demand and value of Bitcoin and Bitcoin blockspace.Runes were launched on April 24, 2024, right after the most recent Bitcoin halving. The introduction of Runes marked another milestone in Bitcoin’s history. With roots firmly planted in the principles of Ordinals, Runes represents the next step in Bitcoin's evolution.What Are Runes on Bitcoin? The Runes protocol is a simpler and more efficient alternative to other Bitcoin standards for creating native, fungible tokens such as BRC-20.They differ from BRC-20 tokens by using a separate data storage model. The data for BRC-20 tokens (as well as Ordinals), are included in the witness data of transactions. In contrast, Runes interface directly within Bitcoin's Unspent Transaction Output (UTXO) model. UTXO is technical jargon for a coin or spendable unit within the bitcoin network.How Do Runes Work?Each newly created Rune is assigned to a specific UTXO which holds information or the rule book about the specific Rune in something called a "runestone". Runestones are messages stored in Bitcoin transaction outputs that can etch, mint, or transfer Runes.Each UXTO can only contain a single runestone, but it may hold balances of many different Rune tokens. Because the Bitcoin protocol already keeps track of UTXOs this allows developers to easily see and manage token balances.The Runes protocol heavily relies upon OP_RETURN to handle its operations. This method allows users to assign and transfer Runes with much more flexibility than other Bitcoin tokens. It also minimizes unnecessary blockchain bloat, reducing stress on the network and the on-chain footprint.Etching and Minting: Creating Rune TokensNew Runes are created in a process called etching. This defines the properties of a Rune which, once set, cannot be changed. Some of the properties set in etching include:NAME: a name between 1 and 28 characters long, which can contain bullets as spacers.DIVISIBILITY: the property defining how many units a Rune can be divided into. For example, a Rune of divisibility 1 can be divided into tenths (0.1).PREMINE: the ability for the creator of a Rune to allocate some units to themselves.TERMS: the period in which Runes can be minted. After the terms close, new Runes cannot be minted. Terms also include the Rune mint cap, amount, start height, end height, start offset, and end offset.If the mint terms of a Rune are open, anyone can mint Runes. This will create new units of that Rune which comply with the terms.Avoid Error or CenotaphsA cenotaph is a malformed Rune that results in all Runes being burned. Mints in a
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