BTC Price Holds Steady as Bitcoin Developers Consider Removing OP_Return Feature

The discussion surrounding Bitcoin’s OP_RETURN is intensifying, as the developers behind Bitcoin Core, the leading node software, announced intentions to completely remove OP_RETURN in the upcoming version.

OP_RETURN currently enforces an 80-byte limitation on the amount of non-financial data that can be included in a Bitcoin transaction via a designated output that is unspendable.

Core contributor Greg Sanders, who works as an engineer at Blockstream and is known as ‘instagibbs,’ stated in a GitHub update regarding the proposed removal, “Large data inscriptions are already occurring and can be implemented in various harmful manners. This cap just results in them being handled in more obscure ways that negatively impact the network.”

The central contention is whether removing the 80-byte cap enhances transparency and streamlines data handling on the Bitcoin network, or if it opens the floodgates for spam, abuse, and diverts focus from Bitcoin’s primary financial objectives.

Sanders also noted that the enforcement of this restriction has incentivized users to embed data improperly in fake public keys or in spendable scripts. He argues that eliminating the limit would offer at least two significant advantages: a more organized UTXO set and enhanced uniform behavior in transactions.

However, there are dissenting voices. Core developer Luke Dashjr has consistently regarded data inscriptions and similar practices as undesirable, expressing his disapproval in April 2025 by labeling the proposed change as “absolute madness.”

In the midst of this debate, Bitcoin Knots, a fork of Bitcoin Core developed by former Core developer Luke Dashjr, is gaining traction and now accounts for around 5% of all nodes.

Bitcoin Knots offers a more customizable alternative to Bitcoin Core, attracting those who desire more authority over the transactions their nodes handle or store, including the ability to reject non-financial transactions such as inscriptions.

Several influential figures in the sector, including Samson Mow, are advising node operators against upgrading their version of Bitcoin Core, suggesting they opt for the Knots version instead.

Sanders defended the elimination of the cap as consistent with Bitcoin’s foundational principles: simplicity and transparency. He articulated, “By removing a deterrent that no longer serves its purpose, Bitcoin Core enables the fee market to manage competing demands.”

Yet, significant disagreement remains. One commenter cautioned on GitHub, “This signifies a crucial transformation in Bitcoin’s trajectory.”

Another GitHub user remarked, “This is the biggest error Core could make at this time; I feel the need to document this.”