[BIP Proposal] Reduced Data Temporary Softfork

The discussion centers around a proposed solution to address concerns regarding large OP_RETURN outputs in Bitcoin transactions. The suggestion is to implement a soft fork that would restrict OP_RETURN outputs to 80 bytes. This approach aims to provide a straightforward method for the market to determine the acceptability of such transactions without the complications or potential negative consequences associated with other proposals, such as BIP-444. It is argued that this method avoids incentivizing undesirable behaviors like embedding illegal content for reorg double spends and does not threaten existing functionalities, such as those provided by Taproot, by altering other primitives.

The rationale behind limiting OP_RETURN output size is not to eliminate all possible ways of embedding data within the blockchain—a goal deemed impossible—but rather to allow the community to express its stance on whether hosting arbitrary data is appropriate. If there are significant legal or consensus-driven reasons to discourage the use of Bitcoin for arbitrary data storage, the immediate support for a clean soft fork from miners could clearly communicate this position. Rapid adoption of these new rules would serve as a clear signal against the use of Bitcoin for such purposes, thereby discouraging future attempts to exploit the network in this manner.

This proposal critiques the perceived overcomplication of the current proposition (PR) under discussion, suggesting that it unnecessarily complicates what should be a simple decision-making process for the market. The author believes that the technical changes required to address the issue of arbitrary data storage on the Bitcoin blockchain should be straightforward, allowing participants to easily understand and make informed decisions without being bogged down by unrelated problems. This perspective seeks to refine the focus of the debate to the specific question of how to handle OP_RETURN outputs, advocating for a solution that ensures clarity and simplicity in addressing the broader community's concerns.