The Bitcoin community is currently embroiled in a debate that echoes back to the earliest days of the cryptocurrency, with Bitcoin Core developers' decision to remove the limit on arbitrary data stored in transactions. This move, slated for implementation in the upcoming Bitcoin Core v30 release next month, involves lifting the 80-byte cap on OP_RETURN, an opcode used for saving non-financial data on the blockchain. The ensuing controversy highlights fundamental disagreements about Bitcoin's purpose and the appropriate use of its blockchain space.
OP_RETURN is a script opcode that marks a transaction output as invalid. Outputs using OP_RETURN are provably unspendable, and can be used to burn bitcoins. In Bitcoin Core's v0.9.0 update in March 2014, the OP_RETURN output script became a standard output type, which allowed users to append data to unspendable transaction outputs. The amount of data usable in these scripts was first limited to 40 bytes, and then later increased to an 80 byte limit.
The removal of the OP_RETURN size limit has sparked heated discussions, with some critics accusing developers of succumbing to corporate influence, while others maintain that arbitrary data storage falls outside Bitcoin's intended scope. Bitcoin developer and advocate Jimmy Song strongly criticized Bitcoin Core for this move, calling it a "fiat mindset". Concerns have been raised that removing the limit could lead to blockchain bloat, increased hardware costs for node operators and ultimately, undermine the decentralization of the network.
The debate's roots trace back to 2010, when Bitcoin's pseudonymous creator, Satoshi Nakamoto, introduced checks to ensure transaction data adhered to intended standards. Even then, the choice to limit arbitrary data storage proved contentious. Some miners expressed their intention to allow non-standard transactions with arbitrary data, as financial incentives could motivate them to adjust their software to enable it. Developer Jeff Garzik argued that attempting to enforce such limits through the official Bitcoin client would be futile, given miners' inherent interest in allowing the inclusion of non-financial data.
Proponents of removing the OP_RETURN size limit argue that the 80-byte restriction is no longer effective in preventing spam and can lead to more harmful practices, such as stuffing data in Unspent Transaction Outputs (UTXOs), which negatively impacts node runners. They believe that increasing data carrying capacity could stimulate innovative applications and support the sustainable development of the network. Peter Todd, a Bitcoin Core developer, submitted a pull request to the Bitcoin Core repository to uncap the amount of arbitrary data that can be placed in the OP_RETURN, moving the limit up to the consensus block size cap of 1MB of non-SegWit data.
The debate also encompasses the fundamental question of Bitcoin's purpose. Some argue that Bitcoin should strictly adhere to its original design as a peer-to-peer electronic cash system, with on-chain transactions limited to transferring bitcoin-denominated value. Others contend that Bitcoin's functionality can be expanded to include various applications through data embedding, fostering innovation on the blockchain.
The OP_RETURN debate has raised concerns about a potential hard fork, reminiscent of the 2017 block size debate that led to the creation of Bitcoin Cash (BCH). The Bitcoin community remains divided, with strong opinions on both sides of the issue. As Bitcoin Core v30 approaches, the resolution of this debate and its potential impact on the future of Bitcoin remain uncertain.
