Impact and Controversy of the Bitcoin Community Discussion on Removing OP_Return Limit

A proposal has recently appeared in the code repository of Bitcoin Core software suggesting to remove the size limit on OP_Return outputs. OP_Return is an output type that allows for the storage of non-transactional data on the Bitcoin blockchain. Currently, Bitcoin Core nodes do not relay transactions that exceed the established limit, but this is not a consensus rule, and nodes will still accept valid blocks containing such transaction outputs.

This proposal has sparked controversy. Supporters of retaining the restrictions argue that it helps prevent spam and hope that Bitcoin is used only for financial transactions. However, a trend has emerged to store images on the Bitcoin blockchain, known as "Ordinals". Unlike OP_Return, Ordinals store images in the input scripts of Taproot outputs, and these transactions are mostly standard transactions that will be relayed by Bitcoin core nodes.

According to statistics from the data platform, the usage of Ordinals is very high, with over 88 million inscriptions and transaction fees paid exceeding 7,000 Bitcoins, which amounts to over $660 million at current prices. Many businesses are developing tools related to Ordinals, such as wallets and inscription trading systems.

There are different viewpoints on whether these images should be considered spam. Some believe that if the purpose of creating transactions is for personal entertainment or speculative profit, then these are not spam. However, if the intention is to maliciously attack others, they can be seen as spam. According to subjective value theory, the value of consumer goods and services depends on individual assessment rather than objective standards.

The Bitcoin mining industry has evolved from a hobby to an industry with publicly listed companies. The management teams of these companies generally welcome Ordinals, viewing it as a potential source of revenue. In a highly competitive industry, this is an important revenue driver.

Retaining OP_Return restrictions may lead miners to establish systems that directly receive non-standard transactions, bypassing the public mempool. This could undermine technologies such as Compact blocks, affecting block propagation efficiency, and may exacerbate the centralization of mining.

For node operators, if the blockchain is full, increasing the use of OP_Return may actually make running a full node easier. OP_Return outputs do not bloat the UTXO set, and the block size containing OP_Return outputs is usually smaller than the maximum.

The key to preventing spam information lies in transaction fees. To enter the blockchain, one must bid higher than other users, which is the only viable model for preventing spam information. The core goal of Bitcoin is to resist censorship, and transaction fees are a fundamental component of the security model to achieve this goal.

Although the OP_Return output limit has existed for many years, with the changing demands, it may now be time to consider removing this restriction. This is similar to past debates about block size, where economic realities drove change.

Overall, removing the OP_Return limit may help maintain the competitiveness of Bitcoin software, make the public mempool more attractive, and encourage a more efficient transaction broadcasting system. While this may allow more non-financial data to enter the blockchain, ultimately the market will determine the value of this data, and Bitcoin may become stronger and more flexible as a result.