OP_RETURN limits: Pros and Cons

The discussion delves into the intricacies of Bitcoin script operations, specifically comparing the cost implications of using OP_RETURN versus OP_FALSE OP_IF for creating nonspendable outputs. A crucial point highlighted is that OP_RETURN is designed explicitly for marking transactions as nonspendable, allowing data to be inserted within these transactions. This method is recognized for its efficiency and directness in achieving nonspendability without unnecessarily complicating the transaction script.

On the other hand, the combination of OP_FALSE OP_IF, while it can also render a transaction output nonspendable, introduces a conditional aspect to the script. This not only makes the script more complex but could lead to higher costs due to the increased data size and complexity involved in executing the script. The primary distinction between these two approaches lies in their execution and impact on transaction fees. While OP_RETURN straightforwardly achieves its purpose with minimal data and cost, using OP_FALSE OP_IF complicates the script and potentially increases the transaction size, thereby affecting the fee.

Moreover, the conversation brings attention to the broader implications of choosing between these two methods from a blockchain efficiency and cost perspective. It is suggested that developers should lean towards OP_RETURN for its designed purpose of creating nonspendable outputs with arbitrary data. This choice supports not only economic efficiency by minimizing transaction fees but also enhances the clarity and simplicity of the script involved.

In essence, the comparison between OP_RETURN and OP_FALSE OP_IF in Bitcoin scripts centers around efficiency, both in terms of economic costs associated with transaction fees and the computational simplicity of implementing nonspendable outputs. The consensus leans towards OP_RETURN as the preferable method, given its direct approach to achieving nonspendability and facilitating data insertion within transactions, underscoring its suitability for applications requiring the embedding of data in the blockchain.