Bitcoin Controversial Proposal: OP_RETURN Data Limit - A Return to Freedom or Increased Congestion?

Compiled by: GaryMa, Wu Says Blockchain

Recently, HashKey's Head of Investment Research @jeffreyhu detailed the background and controversies surrounding the Bitcoin Core proposal "Remove OPRETURN Data Limit." Wu Says has summarized and integrated the viewpoints of relevant community members, compiled as follows.

Background: Controversy over OP_RETURN Data Limit

OPRETURN is an opcode in Bitcoin scripts used to embed a small amount of data in Bitcoin transactions. It allows users to store data on the blockchain, but these outputs are "provably unspendable," thus not increasing the burden on the UTXO (Unspent Transaction Output) set. The current default limit in Bitcoin Core is an OPRETURN data size of 80 bytes, and nodes restrict the propagation of OP_RETURN transactions larger than 83 bytes through node policies (rather than consensus rules).

Developer Peter Todd proposed PR #32359, suggesting the removal of this limit and simultaneously eliminating related configuration options (such as -datacarrier and -datacarriersize), effectively cutting off the nodes' hope of self-configuration, which sparked intense discussion.

Viewpoints Summary

Supporters' Viewpoints:

● The current limit is ineffective because it can be bypassed by directly submitting to the miner's mempool (e.g., MARA Slipstream) or using unrestricted nodes (e.g., Libre Relay). (For example, the known maximum OP_RETURN output is 79,870 bytes).

● Some users even use OP_RETURN to treat the chain as a message board. There are also tools to help package data onto the chain (opreturnbot.com), as long as fees are paid.

● Removing the limit may be more compatible with miner incentives, as miners can earn more income by competing for block space.

Opponents' Viewpoints:

● Removing the limit would lead to more non-transactional data being written to the chain (e.g., shitcoins), crowding block space and driving up transaction fees.

● Although the limit can be bypassed, node policies are still useful (e.g., limiting propagation reduces the pressure of junk data on the network).

Personal Detailed Viewpoints Collection:

Nothing Research Partner @0xTodd: Supports the removal of the 80-byte data limit on OPRETURN, arguing that the current limit is ineffective and that removing it can bring multiple benefits, including a return to Bitcoin's early design, reducing network burden, supporting ecological development, increasing miner income, and aligning with libertarian ideals.

1. Unlimited in Satoshi's Era, Returning to Classics

● In Satoshi's era (early Bitcoin), OP_RETURN had no byte limit.

● In 2014, Bitcoin introduced a 40-byte limit (later raised to 80 bytes) to maintain Bitcoin's "purity" (for accounting rather than data storage).

● 0x_Todd believes that removing the 80-byte limit is not "heretical," but rather a return to the classical design of Satoshi's era, aligning with Bitcoin's original spirit.

2. Current Limit is Ineffective and Easily Bypassed

● The current 80-byte limit is essentially meaningless, akin to a "10 cm high fence," unable to prevent users from storing large data.

● Bypass methods include using Inscriptions, Runes, and other protocols to store data through multiple transactions.

● Bypassing through node policies, such as using the Libre Relay client (whose slogan is "eliminate parentalism in Bitcoin Core relay policies"). Peter Todd (the proposer of PR #32359) is one of the core developers of Bitcoin Core, ranked in the top ten for contributions, and supporting the removal of the limit reflects a "de-parentalization" that deserves support.

3. Reducing the Burden of Inscriptions on the Network

● Inscriptions currently store data by "bugging" the system (e.g., bypassing the 80-byte limit through multiple transactions), increasing the network burden.

● After removing the 80-byte limit, inscriptions can store data directly through OP_RETURN, reducing unnecessary multiple transactions and lowering pressure on the network.

● Additional note: Inscriptions are currently not popular, so this reason is merely "filler" (a secondary reason).

4. Providing Extra Income for Miners, Aligning with Libertarianism

● Removing the limit can bring extra income to miners.

● For example: 0xTodd mentioned a 7MB "super large bug" OPRETURN block, where the sender paid $3,600 in fees.

● This indicates the authenticity of market demand: someone is willing to pay to put large data on the chain, and miners are willing to package it.

● 0x_Todd adheres to a libertarian stance, believing that such "market-determined" behavior (mutual consent) should not be restricted, and hard intervention is meaningless.

● Additional benefit: With Bitcoin's halving every four years, miner income decreases; allowing large OP_RETURN transactions can increase income, incentivizing miners to continue contributing hash power and solidifying the security of the Bitcoin network.

HashKey's Head of Investment Research @jeffreyhu: Tends to oppose the removal of the 80-byte data limit on OPRETURN. He believes that removing the limit may have negative impacts (e.g., non-transactional data crowding block space) while emphasizing the importance of user freedom (retaining configuration options). He thinks that the support and opposition are more about ideological differences, with no absolute right or wrong in the short term. In response to @0x_Todd's four arguments, he elaborates on his viewpoints:

1. Unlimited in Satoshi's Era, but Not Justifiable

● OP_RETURN had no limits in Satoshi's era, but not all of Satoshi's designs were reasonable; many early designs later proved problematic (e.g., some modifications before and after the block wars).

● One cannot simply use "unlimited in Satoshi's era" as a reason to support the removal of limits; Satoshi's designs may not necessarily apply today.

2. Peter Todd's Position and Bitcoin Core's Role

● The removal of limits is merely a proposal from the Bitcoin Core client, not a decision for the entire Bitcoin network.

● Peter Todd is a senior developer whose philosophy leans towards "incentive compatibility" (similar to Full-RBF logic: preventing gentlemen but not scoundrels); proposing the removal of limits aligns with his style, but it is not surprising.

● Bitcoin Core's "parental" approach (e.g., removing configuration options) is worth discussing, as it may limit user freedom.

3. Inscriptions Issue: Limited Significance of Removing Limits

● Removing the 80-byte limit has limited help for inscriptions.

● 80 bytes is insufficient to store large files (e.g., images), but it is enough for the BRC-20 protocol to write JSON data (for issuing tokens).

● Even if Bitcoin provides powerful features (e.g., one-time seals, SegWit), there will always be people who issue tokens on-chain in the "ugliest" way; removing limits cannot fundamentally solve this problem.

4. Miner Income and Libertarianism: User Freedom is More Important

● The impact on miner income is complex (it may increase income, but it could also harm the "exclusive service" advantage of mining pools).

● Supporting libertarianism: Users have the right to pay to put data on-chain; OP_RETURN storage is more elegant than inscriptions (two transactions + increased UTXO dust).

● However, emphasizing user freedom: As a full node operator, he needs the freedom to choose whether to propagate this data (e.g., message board content is irrelevant to him).

● Criticizing Bitcoin Core for removing configuration options (e.g., -datacarriersize and Full-RBF configuration), which deprives users of choice.

● If Bitcoin Core does not provide this freedom, he may switch to Bitcoin Knots or add transaction filters, but he believes this approach may be "futile."

UTXO Stack Founder @crypcipher: Supports the removal of limits, believing it is better to open it up directly than to let people bypass it. He mentioned protocols like ordi that write data exceeding 80 bytes through multiple transactions, and removing the limit can reduce such "useless work" and UTXO dust.

Fiamma Co-founder @cyimonio: Opposes, arguing that some Bitcoin L2 projects (such as storing state data on Bitcoin) merely treat Bitcoin as a data availability (DA) layer, which is not significant and falls under "spending a lot of money for trivial matters."

Consensus Rules and Node Policies

"Since it can be bypassed, are node restrictions still useful?"

They are useful, but to understand this issue, one must start with OP_RETURN and the "consensus rules" and "node policies" it involves.

OP_RETURN is an opcode in Bitcoin's scripting language, whose function is to immediately terminate the execution of the script and mark the output as "provably unspendable."

The behavior of OP_RETURN (terminating script execution and marking output as unspendable) is a core rule of the Bitcoin protocol and is part of the consensus rules. Consensus rules only care about "whether it is unspendable," not the specific size of the accompanying data.

The limitation on the specific size of data accompanying OP_RETURN falls under node policies. Nodes can do quite a bit because they can decide how to handle the transaction data they receive.

● Before going on-chain: Before the block is packed, there are restrictions on whether this transaction can propagate in the P2P network. Bitcoin Core previously did not propagate OP_RETURN transactions larger than 83 bytes, but if such transactions exist in a new block, they will be recognized as valid by nodes since they comply with consensus rules, and the chain will not fork.

● After going on-chain, nodes can also take action, such as automatically discarding the accompanying data of OP_RETURN to reduce their storage overhead.

Possible Impacts and Suggestions

Positive: May increase miner income, support Bitcoin ecological projects (e.g., Runes, Alkanes, and sidechains).

Negative: Crowding block space for ordinary Bitcoin users.

Miner Attitude Uncertain: On one hand, increased competition for block space may increase income; on the other hand, mining pools may not like it, as the "exclusive service" advantage of packaging non-standard transactions will decrease.

Personal Suggestions:

If the PR passes but users dislike it, they can choose to run a stricter client (like Bitcoin Knots) or an older version. Reassess Bitcoin Core's role (weighing security patches, node policies, and consensus rules) and consider choosing a client that aligns better with personal ideals.

Reference Links:

https://x.com/jeffrey_hu/status/1917491946609860991

https://x.com/0x_Todd/status/1917889200684454340

https://x.com/jeffrey_hu/status/1917970887917343184