The Bitcoin community is divided regarding the Bitcoin Core developers’ choice to eliminate the limit on arbitrary data stored in transactions, a discussion that dates back to a debate initiated by Bitcoin creator Satoshi Nakamoto in 2010.
The anticipated release of Bitcoin Core v30 next month will lift the 80-byte restriction on OP_RETURN, an opcode utilized for saving arbitrary data (any non-financial data) on-chain. This decision has sparked controversy, with some accusing developers of succumbing to corporate pressure and others asserting that arbitrary data storage goes beyond Bitcoin’s original purpose.
Nonetheless, this discussion predates OP_RETURN itself, which was introduced in Bitcoin Core 0.9.0 in March 2014. In 2010, when Bitcoin (BTC) was still in its infancy, the protocol’s pseudonymous creator, Satoshi Nakamoto, ignited the same debate by implementing checks to ensure transaction data adhered to established standards.
The decision to limit on-chain storage of arbitrary data is immediately contentious. “Why on Earth would any miner choose to adopt this change, as it would lead to fewer transaction fees due to the exclusion of non-standard transactions?” one user queried.
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Governing with incentives
Bitcoin operates as a decentralized network lacking a central authority to enforce its regulations, complicating enforcement efforts.
If miners have a financial incentive to permit something, like the inclusion of non-financial data on-chain, they are likely to modify their software parameters accordingly. This was also the case earlier, with multiple miners signaling their willingness to accommodate non-standard transactions with arbitrary data.
One user advocated for permitting non-standard transactions up to 128 bytes, but Bitcoin Core developer Jeff Garzik stated that enforcing such limits would be futile:
“It seems pointless for the official Bitcoin client to attempt to ‘legislate’ any restrictions of this nature when all miners have an interest in including every fee-paying transaction.”
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Accepting the inevitable
Users quickly released a patch for the latest version of Bitcoin Core that bypassed checks ensuring transactions adhered to established standards. Early Bitcoiner Christian Decker noted that this moment was significant for Bitcoin’s community:
“I suppose we have the first official release that is challenged by the majority of computation power; Bitcoin is coming of age.”
As suggested by some commenters back in 2010, it is challenging to ensure that miners uphold a rule contrary to their interest in including fee-generating transactions. A January 2024 review revealed that miners like F2Pool were already including non-standard transactions that surpassed OP_RETURN limits.
The OP_RETURN debate is also happening in a different context than the original arbitrary data discussion, where corporate interests are pressuring developers to permit greater on-chain data storage. This need arises because such storage allows for the development of Bitcoin-based systems, including layer-2 networks and more.
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