The Bitcoin Core development team is poised to introduce a significant change to its protocol with the upcoming Core 30 release in October. This update primarily concerns the OP_RETURN setting, an often-debated element within Bitcoin transactions, which will see its data carrier limit dramatically expanded from 80 bytes to nearly 4MB. This move is anticipated to open up new possibilities for data embedding on the blockchain, potentially impacting the development of Bitcoin-centric decentralized finance (DeFi) applications and non-fungible tokens (NFTs).
Understanding the OP_RETURN Transformation
The OP_RETURN function allows for the embedding of small amounts of data within a Bitcoin transaction, traditionally used for non-payment proofs or commitments. Historically, this capability was limited to 80 bytes, a restriction intended to prevent misuse of block space. However, this long-standing ceiling has been deemed outdated and counterproductive by many, including Blockstream’s core developer, Greg Sanders, who announced the change on his GitHub page.
Sanders argues that the original purpose of the 80-byte limit – to protect the network from excessive data – is no longer effective. He emphasizes that the policy surface of Bitcoin should remain lean, allowing the fee market to dictate demand for block space rather than arbitrary limits. The increase to approximately 4MB aligns Bitcoin Core with a philosophy of transparent, minimal rules, moving away from what some consider “editorial preference” in protocol design.
Benefits and Community Debate
The withdrawal of the 80-byte rule is expected to yield several tangible benefits. Key among them are a cleaner UTXO (Unspent Transaction Output) set and more consistent default behavior across the network. By allowing users to embed data in an unspendable output (OP_RETURN), it prevents the creation of “toxic, unspendable entries” that can accumulate in the UTXO set when users resort to embedding data in spendable outputs.
This decision, however, highlights a long-standing philosophical divide within the Bitcoin community, pitting reformist figures like Antoine Poinsot against more conservative voices, such as Luke Dashjr. Dashjr, known for his alternative Bitcoin node software, Bitcoin Knots, has seen a surge in popularity among network operators concerned about the potential ramifications of the expanded data limit. Some community members express apprehension that removing this filter could lead to an influx of “shitcoins on the chain,” as seen in this public statement:
Today is really sad day, Bitcoin Core is now fully malicious. There is no longer any filters on Bitcoin Core agains't shitcoins on the chain. If you still run Core I very strongly urge you to switch to @BitcoinKnots or to not update Core. Bitcoin is our only chance to escape… pic.twitter.com/SGgWZPIcgk
— Satoshi Vault 21 (@satoshivault21) June 9, 2025
Despite these concerns, the Bitcoin Core team maintains that core consensus rules remain intact: blocks are still capped at 4 million weighted units, dust outputs are rejected, and mempool growth is guarded by signature-operation and ancestor/descendant limits.
Standardness Rules and Network Integrity
Greg Sanders further clarified that while consensus rules determine if a transaction can be included in a block, “standardness rules” in Bitcoin Core’s relay code govern whether it is forwarded across the peer-to-peer network to reach a miner. These standardness policies serve crucial roles:
- Denial-of-Service (DoS) Defense: Nodes can decline transactions that disproportionately consume CPU, RAM, or bandwidth relative to their fees.
- Incentive Alignment: Policies guide wallet authors toward fee-efficient and UTXO-friendly transaction constructions.
- Upgrade Safety: Unknown opcodes or version bits remain non-standard until explicitly activated by a soft fork, preventing premature use that could hinder future consensus changes.
Sanders asserts that standardized OP_RETURN outputs align with this philosophy. The existing 80-byte ceiling, intended as a soft deterrent, was large enough for a hash or a short commitment. However, in the modern transaction landscape, this legacy cap has become ineffective and even detrimental, as many private mining accelerators and centralized services do not enforce these limits, utilizing alternative implementations to peer with miners. By removing the constraint, Bitcoin Core aims to provide a more consistent and transparent environment for all network participants.
Blockchain developer and writer, Daniel combines hands-on coding experience with accessible storytelling. He holds multiple blockchain certifications and authors technical explainers, protocol deep-dives, and developer tutorials to help readers navigate the intersection of code and finance.