Runes are usually found on stones in Northern Europe, where they are more likely to be found on large ones stamped into the ground rather than small, handy ones. Image by Nathaniel_U via License: Creative Commons

In itself, the halving would have been a non-event: block 840,000 came, the price remained stable, and the hashrate did not collapse. But the Runes protocol that went live at the halving shook up the market – to the delight of the miners and the annoyance of the users.

On the night of Friday to Saturday, the Bitcoin halving took place, the event that the Bitcoin community had been looking forward to for almost four years, or to be more precise, for 210,000 blocks.

As far as the price and the hashrate are concerned, initially… absolutely nothing happened. Both remained stable. This is what we know from previous halvings.

With the fourth halving, the fifth reward era began. 93.75 percent of all Bitcoins have been mined, and miners will produce a further 3.125 percent over the next 210,000 blocks (around four years).

It could have been a halving like any other: hotly anticipated, but unimpressive when it happens. But things turned out differently. The fifth reward era was greeted with fireworks.

Everything is normal – except the fees

First, let’s look at the statistics used to measure Bitcoin’s vital signs: The hash rate continues to rise, the price remains stable, and the average block size is unremarkable.

There is a slight increase in transactions. April 20 was Bitcoin’s busiest day since January, with approximately 650,000 transactions. But the significance already disappears in the 6-month chart.

Everything as if nothing had happened. But there is one thing that stands out: miner revenue. Actually, as the name suggests, they should be HALVED. Finally, they only create 3.125 Bitcoin per block instead of 6.25. But the opposite happened.

Miners’ income exploded. On a normal, generally good day before the halving, like April 17th, miners took in $61 million that day. As of April 20, it was $107 million. Almost twice as much!

Miners’ daily earnings according to

You can quickly find the reason: transaction fees have skyrocketed. On April 19, the miners received 116 Bitcoin from users as a fee for transactions, which is a relatively normal value. On April 20th, however, there were 1,257 Bitcoin – a record! Never before have so many transaction fees been paid, neither in Bitcoin nor in dollars.

Miners’ total daily fee income. Chart from

The halving had halved the block reward – but the fees offset it twice or triple.

What was going on? The answer cannot be overlooked: Runes were loose.

A serious protocol for non-serious tokens

Block 840,000 not only halved the creation of new Bitcoins, but also brought the Runes Protocol to life. That’s how Runes creator Casey Rodarmor intended it.

Casey is also the creator of Ordinals, the protocol that stomps NFTs into Bitcoin via Taproot. With runes presents he now has a protocol for fungible tokens, like stablecoins or Bitcoin itself.

This actually already exists with BRC-20, a protocol that is based on Ordinals and that sparked a bit of hype last year. But, says Rodarmor, Runes is the better protocol. It doesn’t use the ordinals data structure – which has always been an inconvenient hack with BRC-20 – but the text field in Op_Return.

Runes are stored as UTXOs, and you can pack several different tokens into one transaction, just like Bitcoin UTXOs. This makes the transactions smaller, the transfer more efficient – and in principle allows the tokens to be made Lightning-enabled as HTLC. Runes are, says Rodarmor, “a legitimate competitor to Taproot assets and RGB tokens.”

Casey doesn’t really think much of tokens. He says he is skeptical about “serious tokens,” but has no doubt that Runes is a “serious token protocol.” In a podcast he bluntly said it was a protocol for shitcoins.

Runes are storming the blockchain

Runes’ success so far has been staggering. Runes dominated the blockchain and squeezed everything else out. In the first 80 blocks after the halving, i.e. the first 13 hours, more than 85 percent of the transactions were runes transfers.

As of April 20, Runes accounted for nearly 58 percent of all Bitcoin transactions. On the 21st it was still 52 percent, today it is 34 so far. Normal ordinals and BRC-20 tokens, on the other hand, have become irrelevant at less than one percent.

Share of Runes (far right, magenta) in all Bitcoin transactions according to a dashboard on Dune Analytics.

The runes increase the value of a transaction itself: You can also “mint” tokens with a transaction, i.e. create them, which in principle has a higher intrinsic value than simply sending Bitcoin. As a result, general fees rose rapidly.

Fees per transaction according to

On average, a transaction on April 20 cost $127. Very simple transactions with one input will have been a little cheaper, but anyone who combined many UTXOs could quickly end up with significantly higher amounts. That was good for the miners – but annoying for the users.

What happens next with Runes?

Of course, if you have Bitcoins in the Lightning network – which you should always have – you were able to pay fairly easily.

However, Lightning will also be affected sooner or later. To use Lightning, you have to open and close payment channels, and routing nodes have to pass on the higher operating costs – if the fees remain permanently high.

In fact, it looks more like the hype is fading again after a vertical start. If you can already estimate this today. The share of runes in all transactions is decreasing and the fees per transaction are calming down again. One can assume that in the medium term the market will base Runes on a similar format to Ordinal Inscriptions or BRC20 tokens: not dead, but not overly relevant either.

As far as the ecosystem is concerned, there is little that is promising so far. All of the somewhat popular tokens displayed on appear to be meme coins. The most popular is “Satoshi Nakamoto Inu”, followed by a coin called “Z•Z•Z•Z•Z•FEHU•Z•Z•Z•Z•Z”, and as far as I can see, the previous ones have rune tokens not even a website.

The previous runes act like tokens that have their own purpose because there is now a protocol for them. As with Ordinals and BRC20 tokens, this works in the short term, but to be relevant in the medium term, tokens have to be more: stablecoins, ICO tokens (quasi stocks), governance tokens for a DAO, “real world assets” that pay dividends, for example connected, fractions of an NFT artwork and more.

So far, the Runes ecosystem shows no sign that such tokens are in the pipeline. But who knows? Perhaps the energy that Runes has undoubtedly released will be used to bring a stablecoin to Lightning or other useful assets,

And if not – then Bitcoin now has a vehicle “on top” to exchange shitcoins and memecoins and to make collectors and speculators happy. Which wouldn’t be a breakthrough, but still makes Bitcoin better than before.


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