Relax OP_RETURN standardness restrictions

Reflecting on the evolution of Bitcoin's OP_RETURN functionality and its standardness restrictions reveals a landscape drastically altered by technological advancements and shifting economic realities. When OP_RETURN was initially introduced in February 2014, blockfile pruning had yet to be made available to the public, compelling all node operators to store and serve any data included in a block. This period was marked by proposals for protocol additions that would facilitate almost random access to transactions over the peer-to-peer network, raising concerns about the potential for file trading applications to exploit Bitcoin nodes as servers.

The economic incentives driving miners have also undergone significant changes. In 2014, miners were primarily motivated by subsidy rather than transaction fees, which were relatively insignificant. Consequently, standardness rules were highly effective in regulating the content of blocks, with deviations being rare. At that time, blocks were filled to merely 16% of their consensus capacity limit, making the insertion of large amounts of data into the blockchain both feasible and inexpensive. Contrastingly, the present sees blocks consistently reaching their capacity limits, accompanied by a substantial increase in the minimum fee rate, which has risen in value by a factor of 171 from February 2014 to the present.

User sophistication regarding the implications of inserting data into the Bitcoin blockchain has similarly advanced. Previously, users often lacked a clear understanding of the benefits of data insertion, viewing it as a cost-effective means without considering more suitable alternatives like commitments. Nowadays, alternative communication channels such as IPFS, Nostr, and other blockchains offer viable options, making data insertion into Bitcoin not only more expensive but also less appealing to those who are not technically sophisticated or able to afford evasion of ad-hoc restrictions.

Technical solutions that could allow for fully validating nodes to operate without downloading or processing unwanted data are now closer to realization, whereas previously, such ideas were merely theoretical. Innovations in block propagation techniques have evolved as well; while additional data once slowed block propagation significantly, current methods ensure that only data not relayed in advance experiences delays. This shift highlights a broader understanding of how propagation delays can impact mining centralization, a concern less appreciated in the early discussions following Eyal & Sirer's paper.

The debate surrounding OP_RETURN and standardness limits reflects broader tensions within the Bitcoin community. Initially, the implementation of OP_RETURN was seen as a compromise, introducing a new feature within constrained parameters. Over time, however, opposition to these limits has often been driven by perceptions of authority and misconceptions about conflicts of interest, rather than substantive arguments regarding the utility and implications of the feature itself.

In summary, the journey of OP_RETURN from its inception to the current day encapsulates a microcosm of Bitcoin's broader evolution. What was once a controversial but limited addition to the protocol has become a focal point in discussions about the balance between innovation and regulation, technical feasibility, and economic incentives. This narrative underscores the importance of adapting to changing conditions and reassessing the costs and benefits of protocol features in light of new developments and understandings.