Bitcoin Core Removes OP_Return Limit: A Controversial Upgrade

In a significant network upgrade, Bitcoin Core developers have eliminated the long-standing 80-byte limit on OP_RETURN transaction data. This decision, announced by Greg Sanders on May 5th via GitHub, allows for more efficient data inclusion on the blockchain.

Originally intended as a “gentle signal” to conserve block space, this limit has become obsolete. Peter Todd, at the request of Chaincode Labs, spearheaded the proposal (PR 32359). The removal addresses workarounds like fake output addresses that negatively impact network efficiency, while acknowledging that some mining services were already ignoring the limit.

OP_RETURN, a non-spendable transaction output, gained prominence during the 2024 ordinals inscriptions boom. Unlike regular outputs, it doesn’t bloat the UTXO set. Sanders argues the change results in a cleaner UTXO set, more consistent network behavior, and better reflects current Bitcoin usage. The decision, while having “broad support,” isn’t unanimous.

“Large-data inscriptions are happening regardless and can be done in more or less abusive ways; the cap merely channels them into more opaque forms that cause damage to the network.” – Greg Sanders

Criticism and Controversy: The decision hasn’t been without its detractors. Concerns have been raised about the lack of a formal consensus process, potential conflicts of interest, and the prioritization of data over Bitcoin’s financial utility. Prominent figures like Samson Mow and Marty Bent have voiced their opposition on platforms like X (formerly Twitter), highlighting the lack of consensus and the option for users to remain on older versions. The debate highlights the ongoing evolution and tension between different viewpoints within the Bitcoin community.