OP_RETURN limits: Pros and Cons

OP_RETURN is a script operation used in Bitcoin that allows for a small amount of data to be attached to a bitcoin transaction. It has specific limitations, including an 83-byte limit per output and a restriction to only one output per transaction. These constraints are in place to manage the balance between enabling data embedding within transactions and maintaining blockchain efficiency and scalability. The existence of OP_RETURN limits impacts various aspects of the Bitcoin network. For instance, they influence the Unspent Transaction Outputs (UTXO) set and the resource usage of full nodes. Protocols utilizing Bitcoin for data storage may seek alternative methods due to these restrictions, as direct submissions of transactions to mining pools can bypass typical propagation processes. This bypassing potentially affects fee estimates and compact block relay negatively, as such transactions may not exist in other mempools.

For users who align with the current OP_RETURN limits, several alternatives are suggested, including using a core version with a patch applied, older versions of software that still include necessary bug fixes, or exploring other implementations that respect these boundaries. Conversely, users interested in removing these limits might consider options like Libre relay or Slipstream to meet their needs.

The discussion around OP_RETURN limits extends beyond technical considerations, touching on how these limits affect protocol developers and users' ability to utilize Bitcoin for diverse applications. This topic has been explored in depth in related mailing lists and forums, including a Bitcoin development group thread and insights derived from a Github comment. The conversation aims to remain focused on the technical implications rather than delving into political debates, underscoring a commitment to enriching the understanding of OP_RETURN limits through ongoing research and discussion.