According to PANews, Casey Rodarmor, the founder of Bitcoin NFT protocol Ordinals, has announced the Runes documentation on the X platform. The document reveals that Runes allow Bitcoin transactions to etch, mint, and transfer native digital goods on the Bitcoin network. Although each inscription is unique, every unit of Runes is identical, making them interchangeable tokens suitable for various purposes.
The Runes protocol, known as Runestones, is stored in Bitcoin transaction outputs. A transaction can have a maximum of one Runestone, which can etch a new Rune, mint an existing Rune, and transfer Runes from the transaction input to the output. Transaction outputs can carry any number of Rune balances. Runes are formed through etching, which creates a Rune and sets its attributes. Once these attributes are set, they cannot be changed, and the Rune has pre-mining capabilities. The etcher of a Rune can choose to allocate the etched Rune units to themselves, a process known as pre-mining.
Runestones can be malformed for various reasons, and these malformed Runestones are called cenotaphs. Runes inputted into cenotaph transactions are destroyed. The minting in transactions with cenotaphs counts towards the minting limit, but the minted Runes are burned. Cenotaphs serve as an upgrade mechanism, allowing Runes to be given new semantics, changing the way Runes are created and transferred without misleading un-upgraded clients about the location of these Runes, as they will see the Runes as destroyed.