Bitcoin’s Struggle for Identity: Balancing Data Growth and Decentralization
- MicroStrategy's Michael Saylor reignited Bitcoin protocol debate by sharing a video urging "Run Knots," interpreted as tacit support for stricter data limits against Bitcoin Core's v30 update. - Bitcoin Core's v30 upgrade (Oct 2025) increases OP_RETURN data limits to 100,000 bytes, while Knots maintains 80-byte limit to prevent "parasitic" transactions and node centralization risks. - Saylor's non-technical stance on the dispute has drawn criticism, with Knots adoption surging 638% in 2025 to 14% of node
Michael Saylor, the well-known CEO of MicroStrategy, has sparked renewed discussion in the
The v30 update, planned for October 2025, will raise the standard data cap for OP_RETURN transactions from 80 bytes to 100,000 bytes. OP_RETURN is a Bitcoin command that lets users include arbitrary data in transactions, a feature some critics say could encourage spam or non-financial uses. Bitcoin Core, which powers 70% of nodes title2 [ 2 ], argues that this adjustment brings the protocol in line with miner practices and curbs workarounds like Ordinals, which store data in witness fields. Supporters believe the change will simplify data embedding and help prevent miners from centralizing by directly accepting large data transactions title12 [ 6 ].
Bitcoin Knots, led by developer Luke Dashjr, has refused to adopt the change, keeping the 80-byte restriction to guard against what it calls “parasitic” transactions. The use of Knots has soared by more than 638% in 2025, with 14% of nodes now running it. Advocates for Knots, including notable figures like Samson Mow, warn that the Core update could transform Bitcoin into a “generic database,” increasing storage expenses for node operators and exposing them to legal risks from hosting illegal content. Detractors of Core also point to the removal of customizable data filters, viewing it as a blow to node autonomy title10 [ 5 ].
Saylor’s participation has deepened the divide. In the video he shared, he referred to the OP_RETURN limit dispute as a “second- or third-order change,” and highlighted the community’s “healthy” pushback against what he labeled “inflammatory” responses title1 [ 1 ]. At a recent Bitcoin Treasuries conference, he stressed the importance of caution, noting that even small protocol tweaks could lead to broader systemic issues. Yet, his failure to address the technical specifics—such as node expenses or data overload—has drawn criticism from developers like Paul Sztorc, who described his comments as a “pro-ossification answer” lacking depth title2 [ 2 ].
This dispute echoes earlier controversies, such as the 2023 Ordinals boom, when NFT-like assets triggered similar debates over whether Bitcoin should prioritize monetary or data functions title1 [ 1 ]. Some observers caution that the current rift could fragment the network, with Core and Knots users potentially isolating themselves from one another. A public script to block Knots nodes has already surfaced, fueling worries about undermining Bitcoin’s open-access principles.
With the October launch approaching, the resolution of this issue could significantly influence Bitcoin’s future. If Core’s proposal is widely embraced, it could open the door to new applications but might also increase node costs and centralization risks. On the other hand, if Knots continues to gain traction, Bitcoin’s monetary focus could be reinforced, though at the potential expense of innovation. For now, the community looks to Saylor for further guidance as it awaits a solution to a conflict that highlights the ongoing challenge of balancing decentralization with new use cases.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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