Bitcoin Runes seem to be the latest in a tsunami of innovation on the Bitcoin blockchain.
But these fungible tokens are turning heads. For one, they’re entirely built on the Bitcoin (BTC) network — cleverly contained in Bitcoin’s existing infrastructure.
They’re also opening up new use cases that early Bitcoin users could only dream of.
Think of this article as your entry point into the world of Bitcoin Runes. We’ll walk you through what they are, how they work, and how you can get your hands on them. Let’s begin with the basics.
Runes are changing how the crypto world uses Bitcoin.
It’s not just digital gold anymore. The Bitcoin network is now a blank canvas, allowing tech innovators and entrepreneurs alike the chance to build out new use cases leveraging Bitcoin’s unparalleled security and global reach.
But what are Bitcoin runes?
In short, they’re fungible tokens on the Bitcoin blockchain. Fungible, meaning interchangeable in a 1:1 format. Think of Runes like the dollar bills in your pocket. You can change one out for another, and they’ll still represent a dollar each. Interchangeable = fungible. Make sense?
Well, we hope so.
In reality, the tech behind Runes is pretty complex, even for the crypto aficionados in the room. Don’t worry, though; we’re here to help demystify the Runes magic.
For now, just remember that Runes are a new fungible token standard built on Bitcoin.
So, who’s behind all this fungible madness on the Bitcoin blockchain?
That would be Casey Rodarmor. Way back in September 2023, a lifetime ago in the crypto world, Casey posted a blog* (learn more on Casey’s blog, rodarmor.com) detailing this new idea: Runes.
Casey is also well-known for creating Ordinals, A.K.A. non-fungible tokens (NFTs) on Bitcoin. If you want to learn more, we’ve got you covered in another blog post all about Ordinals.
Now, fungible and non-fungible tokens on Bitcoin aren’t anything new. Casey’s contributions are unique because they don’t leverage off-chain data or layer 2 solutions. What does that mean? It means everything is happening on the blockchain. Every piece of information can be found in bit-sized pieces of Bitcoin called satoshis.
One hundred million satoshis equals one Bitcoin or 0.00000001 BTC.
This is all well and great, but how does this even work? Let’s start unpacking the mechanics behind Runes.
The tech behind Runes is a bit complicated. So, to keep things simple, we’re going to break it down into digestible chunks:
Think of Bitcoin as a bustling factory with a streamlined assembly line (UTXO). It’s so efficient because it only focuses on one thing. Bitcoin Runes are like a new type of product that can be created using the same machinery and production process.
By simply adding a special tag (OP_RETURN) to the product with its specific attributes, Runes can be easily manufactured, shipped, and even customized without interfering with the factory's normal operations. Instead of only making that one product, the Bitcoin factory can now create all kinds of things without changing a single piece of machinery.
So, what can you create with Runes?
As of October 2024, Runes sit at around $1 billion in total market capitalization with just under one million holders* (data from geniidata.com). With all this activity, you might wonder, “What is the use of Rune in crypto?” Here are some key use cases for Bitcoin Runes:
And that’s just scratching the surface. Runes have only been around for a few months, seeing their debut after the Taproot upgrade in the Spring of 2024. We’re still super early in the development of new use cases leveraging the Runes protocol.
Want to get in on the excitement? Wondering how to buy BTC Runes?
It starts with getting ahold of Bitcoin. With BTC in your wallet, you can then venture to a digital collectibles marketplace and trade your coins for Runes. There are a lot of marketplaces and decentralized exchanges that offer Runes support. One of the most popular is Magic Eden* (click the link to explore Magic Eden’s rune marketplace at magiceden.us).
Here are a few more options:
How much is a Bitcoin Rune? Well, it depends. While their price is usually denoted in satoshis, they can still end up costing a few thousand dollars per Rune. Remember, they trade on the open market, much like NFTs, so prices are set by buyers and sellers after the initial mint.
It’s worth noting that you’ll need a special Runes-compatible wallet to view your collectibles.
Some of the above marketplaces, like OKX and Unistat, offer users Rune-compatible wallet options.
You’ll also need to get your hands on Bitcoin in the first place. That’s where Bitcoin Depot can help. We operate the largest network of Bitcoin ATMs in the U.S., Canada, and Puerto Rico — with over 8,300 locations (as of November 2024).
That means you can start purchasing BTC quickly with cash at your nearby Bitcoin ATM.
With BTC in your wallet, you can then get your hands on Runes through a marketplace like Magic Eden.
While we’ve tried to cover the basics, we’re only cracking the door into the world of Bitcoin Runes. In reality, this is a fledgling space within the greater Bitcoin ecosystem, which is only now starting to take shape.
There are still plenty of open questions and topics we just didn't get to in this article (which we’ll be sure to cover in upcoming posts).
By now, you should at least have a good starting point if Runes are on your radar.
It all begins with Bitcoin. On that note, be sure to visit your local Bitcoin Depot location. Our Bitcoin ATMs are your go-to entry point into the world of Bitcoin and, in turn, Runes.
So, what are you waiting for? Find your nearest Bitcoin ATM today.
*The information provided above is for informational purposes only. The inclusion of any particular 3rd party site does not imply an endorsement, sponsorship, or partnership between Bitcoin Depot and the sites listed above. While Bitcoin Depot endeavors to ensure the accuracy and relevance of the information provided, we do not guarantee the reliability of any 3rd party’s information.