Bitcoin Core Lifts OP_RETURN Limit in Major Policy Shift for v30 Release

Bitcoin Core Lifts OP_RETURN Limit in Major Policy Shift for v30 Release

The primary open source software implementation group behind the Bitcoin network called Bitcoin Core, has officially merged a pull request to eliminate the longstanding 83-byte limit on OP_RETURN data, a change set to take effect with its version 30 release in October 2025. This adjustment raises the limit to 100,000 bytes, effectively uncapping the data that can be embedded in transactions, constrained only by standard transaction size limits of approximately 400 kilobytes or the block size limit of 4 megabytes in weight.

The decision, driven by developers like Greg Sanders, Gloria Zhao, Peter Todd, and others, aims to streamline onchain data embedding and aligning Bitcoin Core’s mempool policies with real-world miner practices. While the move has sparked debate over governance and potential network impacts, it is not a consensus change, meaning it poses no risk of a chain split or fork.

The OP_RETURN mechanism, introduced in 2014, allows users to embed small amounts of data in Bitcoin transactions, often for purposes like timestamping or anchoring sidechain data. Initially capped at 83 bytes to prevent spam and network bloat, the restriction has become less effective over time, as users can bypass it by submitting transactions directly to miners, raising concerns about centralization. By lifting the cap, Bitcoin Core seeks to make data embedding more permissionless, encouraging users to rely on the mempool, a decentralized transaction relay system, rather than private miner deals. This change could expand use cases similar to Inscriptions, though it remains distinct from Ordinals, which leverage witness data introduced by the SegWit and Taproot upgrades.

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Decentralization and Network Impact

Critics of the change such as prominent developer Luke Dashjr, argue it could incentivize spam or frivolous data on the blockchain, potentially burdening nodes. However, proponents, including Zhao, counter that OP_RETURN outputs are prunable, meaning they do not permanently inflate the blockchain’s size or strain the unspent transaction output (UTXO) set. Zhao emphasized that the old cap pushed users toward unprunable data methods, which are more harmful to the network’s long-term health. By aligning policy with miner behavior, the update aims to reduce centralizing trends and maintain Bitcoin’s censorship-resistant ethos.

The decision followed months of heated debate within the Bitcoin community, with developers weighing three options: maintaining the cap, increasing it, or removing it entirely. Keeping or raising the limit was seen as arbitrary and ineffective, while removing it gained significant support, though not universal agreement. An open letter from Bitcoin Core developers showed that filtering non-standard transactions contradicts Bitcoin’s permissionless nature, acknowledging that the network will inevitably host diverse use cases.

Controversy has also arisen over governance and communication practices, with some dissenters facing bans from Bitcoin Core's GitHub, mailing list, and related forums like Reddit’s /r/Bitcoin, which these venues have historically banned users for dissenting opinions, which ironically, both groups supported censorship in the past during the Block Size Wars, which at the time they had no problems with when it suited their narrative.

While users can opt for alternative implementations like Bitcoin Knots to enforce different rules, doing so risks isolating them from the majority of the network, which relies on Bitcoin Core currently. The deprecated “-datacarriersize” option allows users to manually enforce the old limit, though its future removal remains unscheduled.

This policy shift reflects Bitcoin Core’s ongoing effort to balance network efficiency with its core principles of decentralization and openness. By prioritizing mempool-based data publishing, the update seeks to reduce reliance on direct miner interactions, fostering a more equitable system. As the version 30 release approaches, the Bitcoin community will be watching how this change influences transaction patterns. For now, the move signals a significant evolution in how Bitcoin handles onchain data.