A contentious proposal to relax Bitcoin’s OP_RETURN data limits has reignited the debate on the future of the blockchain, with supporters arguing it could reduce UTXO bloat and critics warning it could normalize illegal content storage.
Bitcoin Debate on Looser Data Limits Brings to Mind the Divisive Ordinals Controversy
The blockchain‘s OP_RETURN feature allows people to attach a small piece of extra data to a transaction. It is often used for things like notes, timestamps, or digital records. However, Bitcoin developers are again at odds over how the world’s oldest and largest blockchain should handle storing information on-chain.
A proposal to relax long-standing limits on the size of data held has sparked fierce debate reminiscent of 2023’s battles over Ordinals. The proposed change, put forward by developer Peter Todd, would remove the 80-byte cap on such data, a limit originally designed to discourage spam and preserve the blockchain’s financial integrity.
An ordinal is a number that indicates the position or order of something in a set.
It does not describe the quantity, but rather the relationship between items.
For example, in a list of numbers {1, 2, 3}, 'first', 'second', and 'third' are ordinals.
Ordinals can be represented as symbols (e.g., 1st, 2nd) or numerals (e.g., 1, 2).
They play a crucial role in mathematics, particularly in set theory and combinatorics.
Supporters argue that the current limit is pointless because users are already bypassing it by using Taproot transactions to hide data inside parts of the transaction meant for cryptographic signatures. This allows images or text to be embedded into transactions, turning the Bitcoin blockchain into a kind of data storage system. ‘Ordinals and Inscriptions are examples of this, where unspendable transactions are used to store data.’
Critics of the proposal also have another concern. The change could normalize illegal content storage, degrade the chain’s fungibility, and turn node operators into unwitting hosts of malware and copyright violations. For instance, an Ordinals team inscribed a whole Nintendo 64 emulator onto the blockchain, which may get the attention of Nintendo.
Illegal content storage refers to the unauthorized retention of prohibited data, including pirated software, copyrighted materials, and illicit digital files.
According to a report by the International Chamber of Commerce, over 35% of businesses worldwide store illegal content on their devices.
In the United States alone, the Recording Industry Association of America (RIAA) estimates that $12 billion in music revenue is lost annually due to piracy.
Companies found guilty of storing illegal content may face fines and reputational damage.
On the other hand, supporters argue that relaxing OP_RETURN limits may actually reduce UTXO bloat, a phenomenon that slows down the blockchain when the network gets cluttered with non-financial transactions. ‘For example, in May 2023, at the height of Ordinals’ popularity, the Bitcoin blockchain became so congested that Binance had to suspend bitcoin withdrawals for several hours.’
The debate highlights the ongoing battle for Bitcoin’s identity and purpose. One thing is for certain: The intensity of debate on GitHub and blockchain developer mailing lists shows that this issue is far from over.
Bitcoin is a decentralized digital currency that was created in 2009 by an individual or group using the pseudonym Satoshi Nakamoto.
Its primary purpose is to facilitate peer-to-peer transactions without the need for intermediaries like banks.
Bitcoin operates on a distributed ledger technology called blockchain, ensuring secure and transparent transactions.
With its limited supply of 21 million coins, Bitcoin aims to provide a store of value and a medium of exchange for online transactions.
