After Taproot, the most important upgrade for Bitcoin in 4 years.

Should the circumventable "wall" of the OP_RETURN limit be torn down?

Written by: Jaleel Jia Liu

In recent days, there has been a lot of discussion on the external network regarding the proposal to lift the OP_RETURN limit—this proposal was put forward by Bitcoin Core OG developer Peter Todd.

(It is worth mentioning that HBO identified Peter Todd as Satoshi Nakamoto in its heavily promoted documentary "Money Electric: The Mystery of Bitcoin," which led to Peter Todd receiving a large number of funding requests and threats, and he is now living in hiding.)

Although there are many doubts in the community about the OP_RETURN change, according to the announcement made by Bitcoin developer and Blockstream core contributor Greg Sanders (nickname "instagibbs") on May 5th on GitHub: in the next network upgrade, Bitcoin Core will no longer impose any byte or quantity limitations on OP_RETURN.

What is OP_RETURN?

We all know that Bitcoin is an immutable ledger, where every transaction is like writing a line of record on it.

The OP_RETURN is like sticking a "note" on the edge of a page - you can write dozens of words or small pieces of data into it, and this note is marked by the system as "read-only". Others cannot use it as money, nor will it affect the records of other "money" in the ledger.

The reason for having such a "note" feature is that sometimes people want to permanently pin some additional information (such as legal proof, short messages, anniversaries, or even confessions) on the chain, but they do not want to occupy the space for UTXO that is used to store "tradable" bitcoins. With OP_RETURN, this information is like waste paper thrown into a drawer—nodes only leave a trace without occupying storage, and the "available funds" on the chain remain clean and tidy.

In the past, to prevent someone from writing long "notes" that would congest the network, Bitcoin Core by default only allows one OP_RETURN per transaction, with a maximum of 80 bytes of content. If it exceeds this limit, the node will directly refuse to relay and will not help in packaging.

Now, the 80-byte and single-entry limits are gone—write as long as you want, you can have multiple notes, nodes will automatically relay, and miners are happy to package them.

But in fact, there have always been people bypassing 80 bytes.

When there were restrictions on OP_RETURN before, there were also methods to bypass the 80-byte limit. No matter how strict the filtering and relaying strategies are, they cannot stop those who truly want to write data on Bitcoin. Because only miners and transaction fees determine which transactions are included in the blockchain, by offering miners higher rewards, they naturally tend to package more transactions, and the gameplay will not change due to node strategies.

For example, many people know that a Tapoort Wizz NFT image close to 4M filled an entire block, and back in the day, Ordinals inscriptions and runes used various "detours and workarounds" to bypass restrictions, with some even written into spendable outputs, ultimately occupying more resources.

Does this better align with the spirit of Bitcoin?

According to the announcement released by Bitcoin developer Greg Sanders and various developers' consensus, we can know that first, Bitcoin Core has its own "standardness policy" during the transaction relay stage, which serves as a three-tier gatekeeping system before transactions reach miners: first, it prevents "denial of service" attacks by rejecting transactions that consume far more computing power, memory, or bandwidth than the transaction fee; second, it guides wallet authors to construct transactions that save fees while not creating redundant UTXOs; third, it preserves upgrade safety—treating unknown opcodes or version bits as "non-standard" until a soft fork is officially activated.

OP_RETURN and its 80-byte limit are the product of this concept: providing users with a provably "non-spendable" output, which can store small commitments or hashes, while allowing nodes not to include it in UTXO, thus avoiding "wasted" garbage outputs on the chain.

But now this soft cap has become a chicken rib. On one hand, private mining pools and some centralized services do not enforce this rule at all, and anyone who wants to write a large amount of data can bypass the strategy—either by directly paying miners, or by using bare-multisig, fake public keys, or even spendable scripts to hide the information—successfully putting the content onto the chain; on the other hand, constantly adding a bunch of blacklist filters will only evolve into a "cat-and-mouse" game, which neither blocks the most basic data writing nor increases the risk of mistakenly hurting users' funds.

Developers who support the proposal believe that completely removing the 80-byte limit will bring two significant benefits to nodes and wallets: first, the UTXO set will be cleaner, with all data placed in a clear "unspendable" OP_RETURN output, rather than being entangled in various fancy scripts or multiple transactions; second, nodes will have a more unified approach to which transactions they "say" are being propagated, aligning with the actual content packaged by miners, making fee estimation for wallets and compact block relaying more reliable.

Bitcoin developers compared three proposals, and the currently adopted "cancellation" solution has the strongest momentum in the community. More importantly, they believe that the cancellation of the OP_RETURN restriction is the best interpretation of Bitcoin's "transparent and minimalist" spirit: when a strategy has lost its intended function but is still retained, it only adds complexity and friction; removing it makes the node software lighter and purer, allowing each transaction's propagation and packaging to be straightforward — miners only need to determine priority based on fees, and the fee market naturally adjusts the competition for various demands.

Once there is a genuine threat of excessive writing and resource consumption on the blockchain, the Bitcoin ecosystem has a whole set of tested "targeted" defenses: signature operation limits, transaction count caps for previous and subsequent generations, dust rules... These measures precisely targeting specific abuse scenarios are much more flexible than the one-size-fits-all "80 bytes" approach, and can better protect each node and user without harming normal usage.

Will BTC Become a Shitcoin?

The most well-known opponent should be none other than Luke Dashjr.

As a Bitcoin OG, Luke Dashjr, who once stated that "the Ordinals protocol is an attack on Bitcoin" and "inscriptions are garbage, a bug that can be fixed," has been a vocal critic of the Ordinals protocol.

This time, he still firmly stood on the "conservative" side, believing that removing the OP_RETURN limit is a very crazy thing and an attack on Bitcoin. He and others believe that removing the limit will lead to spam and higher transaction fees.

It can be seen that the current focus of debate and disagreement is whether removing the 80-byte OP_RETURN limit will enhance transparency and simplify the use of Bitcoin data, or whether it will open the door to abuse, spam, and a diversion of Bitcoin from its financial focus.

Jason, the vice president of Ocean Mining Pool, is one of the strongest critics. He suffers from insomnia because of it and even stated: "This change will turn Bitcoin into a worthless altcoin."

Willem Schroe, the founder of Botanix Labs, stated that he believes developers should view Bitcoin as a currency system rather than a data storage platform. Another Bitcoin core developer, Mechanic, shares a similar viewpoint: Bitcoin should not be used for arbitrary file storage, and all possible measures should be taken to ensure this.

Some influential KOLs in the industry, such as Samson Mow, are encouraging node operators not to upgrade their Bitcoin Core version or to switch to Knots.

As of the time of writing, according to data from Clark Mood, the usage rate of Bitcoin Knots nodes has surpassed that of the latest version of Bitcoin Core nodes.

This is another challenge to Bitcoin's consensus, just like many times that have happened before. Of course, this also makes us realize that although Bitcoin is more conservative than most networks, it is not static; after the next upgrade, we may also receive a more concise and elegant protocol gameplay than Ordinals, Atomicals, and Runes.