Runes

Casey Rodarmor designed it as a deliberately tidier answer to a mess he had helped create. It went live at block 840,000 on April 20, 2024, the same block that cut the subsidy to 3.125 coins, and the scramble to get into that block made it the most expensive one ever mined. Anyone who withdrew from an exchange that afternoon helped pay for a party they were not attending.

How it works

A Runes message is called a runestone, and it is one OP_RETURN output whose script begins with OP_13.

That opcode is the marker. Software scanning a transaction looks for an output holding OP_RETURN followed by OP_13, then decodes the pushes after it as a compact list of numbered fields. Because the message sits in an output that can never be spent, nodes drop it from the set of live coins they hold in memory, which is the structural argument for building it this way rather than as inscribed data.

Three operations cover the protocol. Etching creates a rune and fixes its name, symbol, divisibility and supply rules. Minting claims an allocation from a rune that permits it. Transferring uses edicts, small instructions inside the runestone stating how many units go to which output of the same transaction. Balances therefore live on outputs, the place bitcoin itself lives, so moving tokens is moving coins.

Names are protected against sniping by a two step commitment. To etch a name you must already have committed to it in an earlier transaction whose output carries at least six confirmations before the etching is broadcast, so a bot watching the mempool cannot read your name and register it first. Runes are identified afterwards by an ID written as block height and transaction index, which makes a rune etched as the third transaction of the launch block 840000:3.

None of this makes bitcoin aware of runes. The consensus rules see an unspendable output containing some bytes and nothing more. An indexer still decides what your balance is, exactly as with the standard Runes was built to replace.

Where you see it

Runes appear on a block explorer as an OP_RETURN output carrying more than the usual handful of bytes, sitting beside normal payments in the same transaction.

For someone here to buy bitcoin, the only contact worth planning around is the fee market. Token launches are scheduled events and they behave like one: demand for block space concentrates into a short window, everybody bids at once, and the price of an unrelated withdrawal triples. Block 840,000 remains the extreme case, collecting roughly 37.6 bitcoin in fees against a subsidy of 3.125, but a smaller version happens whenever a mint opens.

The sensible response is the response to any congestion. Keep non-urgent transfers flexible, use a wallet that lets you pick the fee rate yourself rather than accepting an estimate, and consolidate coins on a quiet day instead of during a rush.

Runes vs Ordinals

Ordinals makes satoshis distinguishable; Runes makes tokens interchangeable. They come from the same author and point in opposite directions, which is where most of the confusion starts. Ordinal theory is a way of reading the chain that requires nobody to do anything, costs nothing, and applies retroactively to every block since 2009. Runes is a live protocol with fees, an on-chain footprint, and no existence at all before block 840,000. You can hold bitcoin containing rare satoshis without ever having heard of either. You cannot hold a rune by accident.