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The long-awaited Bitcoin Core update has entered its second testing phase, igniting fierce debate among developers, investors, and legal experts. The latest release candidate of Bitcoin Core v30 (v30.0rc2) was made available on Sunday, with a full rollout expected by late October.
At the heart of the controversy are sweeping changes to wallet formats and, more significantly, policy shifts that could reshape how data is stored on the Bitcoin blockchain.
According to the Bitcoin Core Project, the update introduces a simplified wallet command system and phases out legacy infrastructure. But the most contentious element is the expanded use of the OP_RETURN opcode, which allows arbitrary data to be embedded in Bitcoin transactions.
Previously capped at 80 bytes, OP_RETURN will now support data inputs of up to nearly 4 megabytes per transaction output. While some view this as a natural evolution of Bitcoin’s flexibility, others fear it undermines the network’s core mission.
“Expanding OP_RETURN capacity risks bloating the blockchain permanently,” said Joe Carlasare, a crypto attorney at Amundsen Davis. “Every node has to store this data, which could increase costs and create new vulnerabilities.”
Supporters counter that higher transaction fees will serve as a natural filter. “If users are willing to pay, they should be free to use block space however they want,” argued one developer in a recent GitHub discussion.
The Bitcoin community has long been divided over non-monetary uses of the blockchain. Purists argue the Bitcoin Core update should remain focused on financial transactions to preserve efficiency and decentralization. They warn that expanded data capacity could encourage spam, malware, and frivolous storage that clogs the system.
Maximalists, by contrast, argue that Bitcoin should remain open-ended. As long as users pay market-driven fees, they say, the network should allow any kind of transaction. “Block space is a commodity as it’s not for developers to decide what’s ‘worthy,’” wrote a contributor on Bitcointalk.
The philosophical clash underscores deeper questions about Bitcoin’s identity: is it strictly a peer-to-peer money system, or a decentralized data layer with broader applications?
Adding fuel to the debate, Bitcoin pioneer Nick Szabo returned to X after nearly five years of silence, cautioning against unintended consequences of the Bitcoin Core update.
“This has always been a problem, of course. But increasing the OP_RETURN allowance will likely make this problem worse. It will also increase legal risks,” — Nick Szabo, Chief Scientist, Jan3.
Szabo argued that while network fees act as a “spam filter” for miners, they don’t adequately protect full nodes that must store all data. He also warned that node operators could face legal scrutiny if harmful or illegal content is embedded directly into the blockchain.
While past court rulings such as one highlighted by Carlasare have generally absolved node operators from liability if they lack control or knowledge of the data, Szabo stressed that legal uncertainty remains.
“Illegal content in a standard, viewable format is more likely to alarm judges and jurors than hidden or fragmented data,” he explained.
The Bitcoin Core update is still undergoing testing, with deployment penciled in for late October, though developers note that the timeline remains flexible. Regardless of the exact launch date, the policy shift is already reshaping discourse around Bitcoin’s long-term direction.
Some analysts argue the change could open the door to innovative use cases, from decentralized identity solutions to timestamping legal documents. Others see it as a slippery slope toward blockchain bloat and regulatory headaches.
“The Bitcoin network was never meant to be a general-purpose data store,” said Carlasare. “By increasing OP_RETURN capacity, developers may be inviting risks that extend beyond technical considerations into the legal arena.”
Meanwhile, institutional investors are watching closely. The debate arrives at a time when demand for regulated Bitcoin investment products, such as spot ETFs, is intensifying. If the update leads to greater uncertainty over blockchain stability, it could influence how regulators assess Bitcoin’s long-term viability.
For now, the Bitcoin Core update remains in testing, with both camps digging in. Developers supporting the change argue it modernizes the network for broader applications. Opponents warn it risks diluting Bitcoin’s founding ethos as “sound money.”
The clash over OP_RETURN is emblematic of Bitcoin’s ongoing evolution. Whether the network emerges stronger or more fragmented will depend not only on technical execution but also on how courts, regulators, and the broader market respond to its expanding role.
As Szabo put it: The debate isn’t just about code but it’s about the legal and social structures that surround Bitcoin.
