A recent analysis by a researcher on the Bitcoin (BTC) block explorer mempool.space, known on X as 'Orange Surf', reveals that 49% of that network's UTXO (unspent transaction output) set is made up of outputs under 1,000 satoshis, while “43% of transactions in the last two weeks included an OP_RETURN or were enrollments.”

On-chain data reflects an increase in non-monetary usage on the Bitcoin network. Source: X.

These data, which reflect a use of the network for non-financial purposes, emerge amid a technical and philosophical discussion that is shaking the Bitcoin ecosystem about the fundamental purpose of Bitcoin, as it questions whether the network created by Nakamoto should prioritize its function as money or allow alternative uses that could modify its original design. 

In addition, and in this environment, there is a notable increase in Bitcoin Knots node operators, to the detriment of a slight drop in Bitcoin Core operators, although the latter continues to be the most widely used software. 

A debate that transcends the technical

The data presented by 'Orange Surf' comes in the context of an intense debate among developers of Bitcoin Core, the most widely used software for interacting with the Bitcoin network.  

The proposal under discussion, led by Antoine Poinsot and reintroduced by Peter Todd, seeks to remove the current 83-byte limit on operations using OP_RETURN, a transaction type that allows non-financial data, such as messages or metadata, to be embedded in the Bitcoin file. It also proposes allowing multiple OP_RETURN outputs per transaction, standardizing their use to reflect current practices and simplifying software code. 

Several leading developers in the Bitcoin ecosystem support Peter Todd's motion. These include Gloria Zhao (one of the Bitcoin Core code maintainers), Jeremy Rubin, James O'Beirne (Jamesob), Michael Folkson (michael1011), and Jameson Lopp.  However, this initiative has generated division, not only because of its technical implications, but also because of what it represents for the essence of Bitcoin. 

More voices joining the debate

Samson Mow, a well-known figure in the Bitcoin ecosystem for promoting adoption, expressed his critical stance on the proposed change: “Anyone can see that there is no consensus on relaxing the OP_RETURN limits. Moving forward with this change is a slippery slope.   ”

Samson Mow furthered his criticism of the Bitcoin Core modifications by analyzing the reasoning he himself points to from those defending them: "From what I see, their argument is that 'it's already broken because people can spam it via Taproot, so we should normalize spamming OP_RETURN.'" 

With this statement, Mow suggests that proponents of relaxing OP_RETURN limits are accepting non-financial use of the network as an inevitable fact , rather than seeking solutions that preserve Bitcoin's primary function as a monetary system. This perspective reinforces his warning about the risks of moving forward with a change that, in his view, would distance the network from its original purpose and entrench practices that many consider detrimental to its long-term functioning. 

Reactions to the Orange Surf data reflect the tensions within the debate. Jason Hughes, vice president of the mining pool OCEAN, expressed concern, noting that these non-financial uses demonstrate "a failure by users and developers to respond appropriately to such attacks on the network ,” compounded by fear and misinformation. According to Hughes, if left unchecked, this could lead to “a centralized and useless ecosystem.”

Specifically, Hughes is pointing to Bitcoin's use for storing non-monetary transaction data, such as inscriptions (which allow files like images or text to be embedded directly into the network, popularized by protocols like Ordinals and Runes) and data wrapped in OP_RETURN.  These practices consume block space, increase storage and processing demands for nodes, and raise transaction fees for users who do use Bitcoin for financial purposes.  

For Hughes, this constitutes an “attack” because it goes against the vision of Bitcoin as an efficient system for transferring value , transforming it into a database for alternative uses that, in his opinion, should not be prioritized. 

Another user on X contributed a view that encapsulates the dilemma: “There’s obviously a huge discrepancy between how Satoshi designed Bitcoin, what TradFi is promoting, and what current on-chain usage looks like. It’s a trilemma.” This statement underscores the tensions between Bitcoin’s original design, the expectations of the traditional financial sector, and emerging user practices. 

Arguments for changes in Bitcoin Core

In contrast, Erik De Smedt, CTO of a Bitcoin payments platform, argued in favor of removing the OP_RETURN restrictions, arguing that the current limit, while introduced with noble intentions, has proven to be ineffective and harmful.  

“I don't approve of JPEGs in the data chain, and I think polluting it with them is irresponsible behavior,” De Smedt clarified, emphasizing that the proposal doesn't seek to encourage more unnecessary data, but rather to reduce the harm already occurring. 

De Smedt explained that the current limit pushes users to hide data in other parts of transactions, such as in the witness, which pollutes the UTXO pool and forces node operators to use more memory and RAM.    

In addition, he noted that those who want to include data like JPEG often submit their transactions directly to large mining pools, excluding smaller pools and contributing to the centralization of mining. “This change isn't about approving JPEG on the network, but rather about mitigating these issues,” he concluded. 

On the other hand, the team behind OP_NET, a platform that promotes decentralized finance (DeFi) functionalities directly on the Bitcoin base layer, offered a different perspective: “Signups have shown that people want to do more with Bitcoin.” This perspective denotes their favorable position for the network to evolve to include broader use cases, a circumstance supported by the data shared by 'Orange surf'. 

As such, the debate over whether to use Bitcoin as a database or a monetary system remains open, and the decisions made by Bitcoin Core developers could have a lasting impact on the network's future direction