Bitcoin Core to unilaterally remove controversial OP-Return limit

Bitcoin Core developers have decided to remove a limit on transaction data in the next network upgrade, enabling more data to be included in a more efficient way. 

“Bitcoin Core’s next release will, by default, relay and mine transactions whose OP_RETURN outputs exceed 80 bytes and allow any number of these outputs,” read the announcement on GitHub by Bitcoin developer Greg Sanders on May 5. 

The long-standing limit was originally a “gentle signal that block space should be used sparingly for non-payment proof of publication data,” has outlived its utility, he added. 

The proposal (PR 32359) was created by Bitcoin pioneer Peter Todd at the request of Chaincode Labs. 

OP_RETURN is a special type of Bitcoin (BTC) transaction output that allows storing small amounts of data on the blockchain, popularized during the ordinals inscriptions craze in early 2024.

Unlike regular transaction outputs, OP_RETURN outputs are not spendable and don’t bloat unspent transaction outputs (UTXOs).

The original limit is no longer effective as people found ways around it, such as using fake output addresses, which are actually worse for the network, while some mining services were already ignoring the limit, said Sanders. 

Related: Bitcoin block size could grow to 4 MB with inscriptions: Research

Benefits of removing the limit include a cleaner UTXO set, or database of spendable outputs, more consistent behavior across the network, and better alignment with how Bitcoin is actually being used, he added. 

Three possible paths were considered: keeping the cap, raising the cap and removing the cap, which was ultimately decided upon after earning “broad, though not perhaps unanimous, support.” 

“Many users find this to be an undesirable change for a number of reasons,” said Bitcoiner Samson Mow on X on May 5. He added that users “can refuse to upgrade and stay on 29.0 or run another implementation” of the network. 

Critics said that the proposal was introduced without a proper consensus process. 

“I think one thing is pretty clear, there is no consensus at the moment on this OP_RETURN issue,” said Ten31 Fund managing partner Marty Bent.

Some also expressed concerns about deprioritizing Bitcoin’s financial utility and raised questions about undisclosed conflicts of interest.

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