Bitcoin Core developers decided on May 5 to remove the limit on transaction data in the next network upgrade. This change allows more data to be included in Bitcoin transactions more efficiently. The announcement was made on GitHub by Bitcoin developer Greg Sanders.
The long-standing limit on OP_RETURN outputs, initially intended to discourage excessive use of block space, has become obsolete. According to Sanders, users have found ways around the limit, leading to more harmful practices for the network.
The decision to remove the cap aims to achieve a cleaner UTXO set, more consistent network behavior, and better alignment with actual Bitcoin usage. While the proposal garnered broad support, some critics, including Bitcoiner Samson Mow and Ten31 Fund managing partner Marty Bent, expressed concerns about the lack of consensus and potential conflicts of interest.
OP_RETURN is a special type of Bitcoin (BTC) transaction output that allows storing small amounts of data on the blockchain, popularized during the ordinals inscriptions craze in early 2024. Unlike regular transaction outputs, OP_RETURN outputs are not spendable and don't bloat unspent transaction outputs (UTXOs).
Three possible paths were considered: keeping the cap, raising the cap and removing the cap, which was ultimately decided upon after earning "broad, though not perhaps unanimous, support."
Critics said that the proposal was introduced without a proper consensus process.
Some also expressed concerns about deprioritizing Bitcoin's financial utility and raised questions about undisclosed conflicts of interest.
This article is based on our author's analysis of materials taken from the following resource: Cointelegraph.