Satoshi comments on arbitrary data shows how old the OP_RETURN debate is

The Bitcoin community is split over Bitcoin Core developers’ decision to remove a limit on arbitrary data stored in transactions, a move that traces back to a debate first raised by Bitcoin creator Satoshi Nakamoto in 2010.

Bitcoin Core v30’s expected release next month will remove the 80-byte cap on OP_RETURN, an opcode used for saving arbitrary data (any non-financial data) onchain. The decision has proved controversial, with some accusing developers of bowing to corporate influence and others arguing that arbitrary data storage is outside Bitcoin’s intended scope.

However, this debate is much older than OP_RETURN itself, which was introduced in Bitcoin Core 0.9.0 in March 2014. Back in 2010, when Bitcoin (BTC) was barely a year old, the protocol’s pseudonymous creator, Satoshi Nakamoto, sparked the same debate by introducing checks to ensure that transaction data complied with the intended standards.

Satoshi’s post on Bitcoin Forum. Source: Bitcoin Forum

The choice to limit the storage of arbitrary data onchain is immediately controversial. “Why on Earth would any miner adopt this change, when it means that they will be getting fewer transaction fees due to the lost non-standard transactions?” one user asked.

Related: Jimmy Song slams Bitcoin Core devs for ‘fiat’ mentality on OP_Return

Governing with incentives

Bitcoin is a decentralized network with no central authority able to enforce its rules, which complicates enforcement.

If miners have a financial incentive to allow something, such as the inclusion of non-financial data onchain, they are likely to adjust the parameters of their software in a way that enables it. This was the case back then, too, with multiple miners announcing that they would allow non-standard transactions with arbitrary data.

One user suggested allowing non-standard transactions up to 128 bytes, but Bitcoin Core developer Jeff Garzik said that attempting to enforce such limits would make little sense:

“It seems pointless for the official Bitcoin client to attempt to ‘legislate’ any restrictions of this type when all miners have an interest in including any and all fee-carrying transactions.“

Related: Bitcoin Core default minimum relay fees decrease 90% as update rolls out

Accepting the inevitable

Users also quickly released a patch for Bitcoin Core’s latest version that did not include checks to ensure transactions follow established standards. Early Bitcoiner Christian Decker recognized that this was an important moment for Bitcoin’s community:

“I guess we have the first official release that is disputed by the majority of computation power, Bitcoin’s coming off age.”

As suggested by some commenters back in 2010, it is hard to ensure that miners enforce a rule that goes against their own incentive to include fee-paying transactions. A January 2024 review showed miners like F2Pool were already including non-standard transactions that exceeded OP_RETURN limits.

The OP_RETURN debate is also occurring in a different environment than the original arbitrary data debate, one in which corporate interests are pressuring developers to allow for more onchain data storage. The reason is that storing such data enables the development of Bitcoin-based systems, such as layer-2 networks and others.

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