Bitcoin Core is planning to remove the 80-byte OP_RETURN limit in its next update, igniting a heated debate within the community. Core developer Greg Sanders supports the move, suggesting it will clean up the UTXO set and ensure consistent node behavior. However, critics like Luke Dashjr argue it could open the floodgates to spam and misuse, threatening Bitcoin's core purpose as a financial protocol.

The OP_RETURN function allows embedding arbitrary data in Bitcoin transactions. Currently, it’s capped at 80 bytes. Sanders claims that users already bypass this by embedding data in more harmful ways, and lifting the cap would make data use more transparent. However, Dashjr warns that this could increase network abuse and encourages using Bitcoin Knots, a fork of Bitcoin Core with stricter controls, now gaining nearly 5% adoption.

Amid this disagreement, key figures like Samson Mow are urging node operators to avoid upgrading to the new version, highlighting potential risks of turning Bitcoin into a general-purpose data layer.

Bitcoin Core plans to eliminate the OP_RETURN data limit, a controversial move that could either improve data transparency or increase network spam—splitting the community between innovation and protocol purity.

The planned removal of the OP_RETURN limit introduces uncertainty around Bitcoin’s use case and network integrity. While technically it may optimize UTXO management, the perceived risk of spam, increased blockspace competition, and a shift away from Bitcoin’s financial utility could negatively impact investor sentiment in the short term.

Moreover, rising support for Bitcoin Knots signals a potential fracture in the node ecosystem, raising concerns of fragmentation. If node operators widely reject the upgrade or diverge on protocol direction, market confidence in Bitcoin governance may dip, creating short-term selling pressure on $BTC .

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