What exactly is Bitcoin when the OP_RETURN expansion storm is resurrected?

Jessy, Golden Finance

According to June 9, Bitcoin Core developers plan to release the 30th version of Bitcoin Core Software in October this year. This version will no longer filter OP_RETURN output containing a large amount of non-financial data. This change will increase the default data carrier limit from the current 80 bytes to nearly 4MB, while allowing node operators to manually modify the -datacarrier and -datacarriersize parameters.

As soon as this news came out, it immediately triggered fierce discussions in the Bitcoin community. Proposal supporters believed that this was a necessary step to unlock the potential for innovation on the chain, while opponents regarded it as a betrayal of Bitcoin's core value. The intense emotions even led to some Bitcoin holders clearing their positions and leaving the market.

The OP_RETURN expansion storm has been going on for nearly two years. Although core developers plan to implement expansion in the Bitcoin core software updated in October, the controversy continues, and this is not the final result.

What is capacity expansion? Why it causes controversy

The storm first started in July 2023.

On July 23, 2023, Peter Todd, a core developer and the core promoter of the expansion group, submitted PR#28130, proposing to remove the restrictions on carrying data of OP_RETURN, but failed.

OP_RETURN is an opcode in a Bitcoin script that is used to embed a small amount of data in a Bitcoin transaction. It allows users to store data on the blockchain, but these outputs are "provably unspendable" and therefore do not add to the burden on the UTXO (unspent transaction output) set. The current default limit for Bitcoin Core is that the OP_RETURN data size is 80 bytes and the propagation of OP_RETURN transactions greater than 83 bytes is restricted by node policies (rather than consensus rules).

On April 28, 2025, Peter Todd submitted another proposal for the same content PR#32359, while instagibbs proposed a relatively mild proposal for the PR#32406, which recommended that the configuration options be kept for the time being, but no restrictions were made by default. On June 9, Bitcoin core developer Gloria Zhao posted on GitHub that the Bitcoin Core 30 update, scheduled to be released on October 30, will remove the 80-byte limit of the OP_RETURN function, allowing each output to carry up to 4 megabytes of data. At present, the controversy caused by the change is still continuing, and there are major differences in the community's views on this change.

The core proposition of these developers who are driving expansion is roughly that the current 80-byte limit hinders the development of key applications. For example, if data embedding that complies with the W3C verifiable credentials standard requires more than 96 bytes of space, enhanced Lightning Network atomic exchange metadata and complex state proofs of the RGB protocol may also be affected by the 80 byte limit, resulting in the inability to fully or efficiently implement related functions.

As soon as this news came out, it once again sparked a fierce debate in the Bitcoin community. The pros and constituents held their own opinions, and opponents were also expressing their protests with actions. As on June 11, Jason Hughes, vice president of mining pool OCEAN, announced that he would sell all of his Bitcoin and exit the industry in protest of the recent OP_RETURN change decision.

This expansion dispute that has spread for nearly two years will trigger a lot of discussion every time there is a latest progress, but more discussions are different opinions within the Bitcoin Core development team and the resulting debate among the extremely believers of Bitcoin. For example, some developers believe that the risk of a slight expansion is controllable and the benefits are obvious; the other faction strongly opposes it, worried about sliding into the abyss of functional expansion. Technical discussions quickly escalated into a battle of ideas.

Interestingly, mainstream mining pools and exchanges generally do not express their opinions on this.

The core of the controversy: What is the ultimate role of Bitcoin?

Supporters first start with Satoshi Nakamoto's original design intention. They believe that the Bitcoin protocol of the Nakamoto era has no data size limit on OP_RETURN. Removing the 80-byte limit is a return to the original spirit of Bitcoin, which is in line with its essence as an open system. Technology should remain open and its purpose is determined by community innovation. The current 80-byte limit can be bypassed by directly submitting miner mempools (such as MARA Slipstream) or unlimited nodes (such as Libre Relay), which is useless, so removing the limit does not actually bring more risks.

On the other hand, expansion will also reduce the burden on the network. Protocols such as Inscriptions currently store data of more than 80 bytes through multiple transactions. After removing the restrictions, Inscriptions can directly store data through OP_RETURN, reducing unnecessary multiple transactions, thereby reducing pressure on the network.

In addition, the expansion can also increase the income of miners. With the halving of Bitcoin every four years, miners' income will decrease. Large-sized OP_RETURN transactions can allow miners to obtain more income through competing for block space, incentivize miners to continue to invest in computing power, and consolidate the security of the Bitcoin network.

The main point of view of opponents is that this move will squeeze out block space, and removing restrictions may lead to more non-transaction data (such as spam, low-value tokens, etc.) being written to the chain, squeezing block space, and thus pushing up transaction fees, affecting the efficiency and practicality of Bitcoin as a value transfer network. And this goes against the original intention of Bitcoin as a value transfer network, and may turn blockchain into a data storage platform, keeping images, text and audio away from blockchain, and keeping Bitcoin's "purity" used for accounting rather than data storage.

In addition, Bitcoin Core removes configuration options (such as -datacarrier and -datacarriersize) is considered to deprive users of the right to choose independently and force the adoption of a "paternal" strategy. The retaining configuration options are more in line with Satoshi Nakamoto's "one CPU, one vote" decentralized concept.

And the controversy is so fierce that in essence, what everyone is discussing is what is the ultimate role of Bitcoin in this world? Is it a pure and tampered with "digital gold" and the cornerstone of value storage? Or is an underlying settlement layer that supports limited but useful applications?

OP_RETURN expansion touches on this fundamental philosophical difference. Opponents believe that any attempt to apply is a blasphemy of "sacredness"; supporters believe that only moderate evolution can last forever. Times are changing, and public chains are constantly rising, and Bitcoin is once again at the crossroads of choice.