🔲Intro: Runes on Bitcoin

What is the Runes Protocol?

The Runes protocol allows for the creation of Bitcoin-native digital commodities known as "runes." Unlike individual inscriptions that are unique, runes are fungible tokens, meaning each unit of a rune is identical and interchangeable, similar to traditional cryptocurrencies.

Runes operate on the Bitcoin blockchain using a system of messages called "runestones," which are stored in Bitcoin transactions (outputs). These runes can be etched, minted and transferred through Bitcoin transactions, making them a versatile tool for digital finance.

Key Features of Runes

• Runestones: Messages stored in transactions (outputs) that dictate the actions of runes within the transaction. (kind of compareable with a Smart Contract)

• Etching: The process of creating new runes with specific properties that, once set, are immutable. (Etchings = setting the rules)

• Minting and Transferring: Runes can be minted and moved from one transaction output to another, following the rules set in their respective runestones.

Common Misunderstandings

It's important to note that the Runes protocol allows anyone to create tokens named however they choose. This has led to confusion as some projects have used the name "runes" for their tokens, which are not directly related to the Runes protocol developed on the Bitcoin blockchain. The Runes Protocoll will start on Block 840000 (approx. 20th April), however many projects are already offering so called "pre-runes", which is basically a promise to receive a Runes airdrop in the future.