Bitcoin OP_RETURN Size Limit Removal: A Policy Shift with Broad Implications
TL;DR
What Is OP_RETURN?
OP_RETURN is a Bitcoin script opcode introduced in 2014, allowing users to embed small amounts of arbitrary data into transactions. These outputs are provably unspendable, meaning they don’t contribute to the UTXO (Unspent Transaction Output) set, thereby preventing unnecessary bloat in the blockchain’s record of spendable coins. Initially, OP_RETURN had a 40-byte limit, which was later increased to 80 bytes to accommodate more use cases while still discouraging excessive data storage on the blockchain.
The Proposal and Its Timing
The push to remove the OP_RETURN size limit began with Peter Todd’s Pull Request #28130 in July 2023. Although this initial proposal was closed without adoption, Todd revisited the idea with PR #32359 in April 2025. This renewed effort coincided with a surge in non-financial uses of Bitcoin’s blockchain, such as Ordinals and inscriptions, which embed data like images and text directly into transactions. These practices often bypassed the OP_RETURN limit by using alternative methods, leading proponents to argue that the existing cap was both ineffective and counterproductive.
In June 2025, Bitcoin Core maintainers signaled readiness to merge the proposal after extensive discussion and resolution of objections. The rationale emphasized not the promotion of data storage, but the correction of a technical asymmetry: less harmful OP_RETURN outputs were discouraged, while UTXO-bloating methods remained usable.
As of the latest update, the change is now official: Bitcoin Core 30, scheduled for release on October 30, 2025, will remove the 80-byte OP_RETURN limit and allow up to 4 megabytes of data per output. This follows the merged pull request #32406, backed by 31 Bitcoin Core developers in a signed support statement.
Arguments in Favor of Removing the Limit
Reflecting Current Practices
Advocates note that many users already circumvent the 80-byte restriction through methods like Taproot-based inscriptions. Removing the limit would align official policy with actual usage patterns.
Reducing UTXO Bloat
By allowing larger OP_RETURN outputs, users can avoid creating fake spendable outputs to store data, which unnecessarily bloats the UTXO set.
Enhancing Flexibility
Lifting the cap could facilitate various applications, including cross-chain bridges, sidechains, and timestamping services, by providing a standardized method for embedding larger data payloads.
Market-Driven Resource Allocation
Proponents argue that transaction fees serve as a natural deterrent against excessive data storage, allowing the market to regulate usage without arbitrary limits.
Avoiding Centralization Pressures
The recent rationale emphasized that strict relay policies push users toward submitting transactions directly to miners, circumventing the mempool. This undermines the decentralization and censorship-resistance of Bitcoin by promoting private blockspace markets.
Preserving Compact Block Propagation
Allowing OP_RETURN-based data (which is prunable) instead of harmful alternatives supports efficient propagation and fast node synchronization.
Expanding Bitcoin Use Cases
Lead author Peter Todd and others argue that this opens Bitcoin to broader non-financial applications—such as document archiving, decentralized media, or public records—without changing its core monetary properties.
Arguments Against Removing the Limit
Risk of Spam and Abuse
Critics fear that eliminating the size cap could open the door to spam transactions, as users might flood the network with large, non-essential data, potentially degrading performance.
Deviation from Bitcoin’s Core Purpose
Some community members, including prominent figures like Luke Dashjr and Samson Mow, argue that Bitcoin should focus solely on financial transactions. They contend that accommodating arbitrary data storage dilutes Bitcoin’s identity as a decentralized monetary system.
Potential for Increased Costs
There are concerns that larger data transactions could lead to higher fees and storage requirements, making it more burdensome for nodes to operate and maintain the blockchain.
Lack of Consensus
While developers approved the merge, backlash from parts of the community continues. Bitcoiners like Dennis Porter expressed disillusionment, stating:
“I’ve helped raise over $200,000 for core devs during my time in Bitcoin. My faith in their work is now broken.”
Market Fragmentation
Since the proposal’s announcement in April 2025, Bitcoin Core’s node dominance has dropped from ~98% to around 88%, according to coin.dance. Most of that share has gone to Bitcoin Knots, which retains stricter policies on non-financial data.
Perceived Reputational Damage
Bitcoin commentator Matthew R. Kratter warned on X that Bitcoin Core’s dominance could fall to 20–30% over the next 1–3 years if decisions like this continue.
Community Division
Reforge co-founder Alexander Lin called the proposal a “terrible mistake,” claiming it introduces systemic risk to Bitcoin’s sound-money narrative.
Anticipated Outcomes
Increased Data Embedding
Users may take advantage of the new flexibility to embed larger data payloads directly into the blockchain, potentially leading to a rise in non-financial transactions—including media, legal documents, and on-chain publications.
Network Performance Monitoring
The community will likely monitor the impact on network performance, including block propagation times and storage requirements, to assess whether the change introduces any adverse effects.
Alternative Client Behavior
Clients like Bitcoin Knots, which already enforce stricter policies, may gain further adoption from users and miners who prefer stricter controls on transaction content.
Long-Term Community Fractures
Disillusionment among long-time supporters could deepen, especially if OP_RETURN is increasingly used for controversial or trivial content.
Debates on Bitcoin’s Purpose Continue
The change may reignite discussions about Bitcoin’s fundamental purpose, balancing its role as a financial system against emerging uses as a general-purpose data ledger.
“Demanding that Bitcoin Core prevent certain transactions from being mined reflects a misunderstanding of the relationship between open source software users and developers.”_Gloria Zhao
Conclusion
The removal of the OP_RETURN size limit in Bitcoin Core 30, effective October 30, 2025, marks a significant shift in Bitcoin’s technical and philosophical landscape. By allowing up to 4 megabytes of data per OP_RETURN output, the update aligns the protocol with existing practices like Ordinals and inscriptions, reducing UTXO bloat and enhancing flexibility for non-financial applications such as cross-chain bridges and document archiving. Proponents, led by Peter Todd, argue that this change supports Bitcoin’s decentralization by discouraging private blockspace markets and preserving efficient block propagation. However, critics, including prominent Bitcoiners, warn of potential spam, higher costs, and a deviation from Bitcoin’s core monetary purpose. The decision has already sparked community division, with Bitcoin Core’s node share dropping to 88% and alternative clients like Bitcoin Knots gaining traction. As the network adapts, the community will closely monitor performance impacts and ongoing debates about Bitcoin’s identity as either a financial system or a broader data ledger.
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What is the new OP_RETURN data limit on Bitcoin?
As of Bitcoin Core 30 (Oct 2025), the OP_RETURN limit is increased from 80 bytes to 4 megabytes per output.
Why did Bitcoin remove the OP_RETURN limit?
To align with existing practices like Ordinals, reduce UTXO bloat, and enable flexible applications like cross-chain bridges and timestamping.
Does the OP_RETURN change make Bitcoin slower or riskier?
Some argue it could increase spam and storage demands, but the data is prunable and regulated by fees—actual impact will depend on user behavior and client adoption.
