Bitcoin Runes: The most efficient alternative for creating tokens on the chain

Why did Bitcoin need runes?

For years, the crypto community has sought a way to create digital assets directly on Bitcoin without complications. Previous protocols like BRC-20 worked, but at a cost: each transaction generated massive inscriptions that congested the network. Bitcoin Runas came as a solution to this problem, leveraging native mechanisms of Bitcoin that have always existed but had never been used in this way.

What is Bitcoin Runas really?

Bitcoin Runas is a mechanism that simplifies the creation of fungible digital assets directly on the Bitcoin blockchain. Unlike other protocols like BRC-20 and SRC-20 that rely on more complex systems, runes utilize two fundamental tools that Bitcoin already had: the UTXO model and the OP_RETURN opcode.

Innovation is not about inventing something new, but about using what already exists in a smarter way. That's why it is simpler, faster, and less demanding on network resources.

The technical engine: How do runes really work?

The UTXO model explained simply

Bitcoin works with a system called UTXO (Unspent Transaction Output). Imagine each transaction as a physical coin: when you spend it, you create new coins as change. Each of those “new coins” is a separate UTXO.

In the case of Bitcoin Runas, each UTXO can contain different amounts or types of runes. This allows for precise tracking of where each unit of the rune is located, without the need to create additional structure. It's as if each coin had inscribed what asset it represents.

The opcode OP_RETURN: The data store

OP_RETURN is a special operation in Bitcoin that allows you to attach information to a transaction. Specifically, it stores up to 80 bytes of additional data without being spent on the network.

Bitcoin Runas uses this space to store critical information: the name of the token, its symbol, ID, commands for specific actions, and other essential parameters. All of this is organized in what is known as “Runestone” within the opcode OP_RETURN.

This is the key to efficiency: 80 bytes of ordered data versus thousands of bytes in traditional inscriptions.

The life cycle of a rune: Creation and issuance

The engraving: Bringing a new rune to life

The process begins with the “engraving”, which is basically the specification of the initial parameters. The one who creates the rune must define:

• Token name and symbol
• Unique ID
• Total supply amount
• Level of divisibility (how many decimals)
• Other technical parameters

All these details are permanently recorded in the OP_RETURN output of the transaction. An important feature is that creators can include a “premined” allocation, assigning themselves a portion of the token before making it public. This flexibility is something that other protocols do not offer in the same way.

Minting: Two different paths

Once recorded, the rune enters the minting phase. This is where Bitcoin Runas offers real options:

Open Minting: Anyone can create new runes after the initial engraving by simply executing minting transactions. There are no barriers or Gatekeepers. Ideal for projects that want maximum participation from the start.

Closed minting: New runes can only be created when specific predetermined conditions are met. For example, during a limited time period, or under certain requirements. Once those conditions are met, minting ends.

This flexibility sharply contrasts with other protocols that only allow open minting.

Runes vs. BRC-20: Beyond the Surface

How they work internally

BRC-20 is built on the Ordinals protocol, where data is directly attached to individual satoshis (, the smallest unit of Bitcoin ). Bitcoin Runes, on the other hand, works directly with the UTXO model and OP_RETURN, without relying on Ordinals.

This difference is fundamental: Runes is more “native” to Bitcoin, while BRC-20 adds an additional layer of complexity.

Transfers: The true differentiator

When you transfer a rune, the blockchain creates a new set of UTXOs with the data stored in the OP_RETURN field. The process is straightforward.

In contrast, each BRC-20 transfer requires creating a new inscription. It's like having to write a completely new document every time you send the token. More transactions, more data, more congestion.

Initial distribution: Flexibility vs. limitations

Bitcoin Runas allows for pre-mining and closed minting, giving creators control over how the tokens are initially distributed.

BRC-20 is limited to open minting only. If you wanted a more controlled distribution, you simply did not have that option.

Compatibility: What really matters

Bitcoin Runas is compatible with the Lightning network and works with both Lightning clients and SPV wallets (Simplified Payment Verification). This means that practically any modern wallet can support runes without major changes.

BRC-20 requires wallets specifically designed for the Ordinals protocol. Fewer wallets, fewer users, less accessibility.

The real benefits of Bitcoin Runas

Efficiency that is noticeable on the network

Each rune occupies 80 bytes of data in OP_RETURN. BRC-20 inscriptions can use up to 4 MB. The difference is astronomical.

What does this mean? Less congestion, faster transactions, less pressure on Bitcoin nodes. The network breathes better. For users, it means lower fees and faster confirmations.

Simplicity that reduces friction

You don't need off-chain systems. You don't need to create special “native” tokens. You don't need to generate piles of useless UTXOs that will float around the network.

Bitcoin Runas allows you to create and manage multiple fungible assets directly on the chain, hassle-free. It is more accessible for developers and projects. The barrier to entry is significantly reduced.

A magnet for new users

Ordinals and BRC-20 had already shown that there was demand for meme coins and tokens on Bitcoin. The launch of Bitcoin Runas in April 2024 generated a considerable initial spike in interest, attracting new communities to the Bitcoin network.

Although activity normalized after the initial launch, Runas represents a new use case that may bring more users in future cycles. Each new tool in Bitcoin is a magnet for explorers of the crypto ecosystem.

What you should retain about Bitcoin Runes

Bitcoin Runas is not just “another token protocol”. It is a smarter way to do the same thing, using exactly what Bitcoin already has. It was designed with efficiency, compatibility, and accessibility in mind.

For users and developers it means: fungible tokens on Bitcoin without the data overhead, with more distribution options, compatible with more wallets, and with less pressure on the network.

It is an example of how innovation in crypto is sometimes not about building from scratch, but rather about using existing tools more effectively. Bitcoin Runas demonstrates this perfectly.