Unpacking the Great Bitcoin Core Debate of 2025
How a seemingly simple proposed protocol change reveals the future of Bitcoin’s incentives, decentralization, and global utility
Introduction: The Crossroads of Bitcoin’s Future
In early 2025, Bitcoin finds itself at a pivotal juncture, not because of price volatility, ETF flows, new regulations, or policy support from the current U.S. Administration, but because of a quiet civil war brewing in its core code and the volunteer developers that maintain it.
The flashpoint? A proposed change called Bitcoin Core PR #32359, which would lift limits on how much arbitrary data can be stored in Bitcoin transactions via a feature known as OP_RETURN.
Now I realize that 99.99% of us may find this obscure technical plumbing talk unappealing and want to move on from this post. Still, the stakes are profound, and I will do my best to make it relevant to you as an investor and a citizen of our global society and its future economy. Stay with me.
This isn’t just a discussion about bytes or blocks—it’s about identity, sustainability, and the future of Bitcoin’s incentive model itself. With each passing “halving” (a programmatically scheduled event that cuts the Bitcoin mining reward in half every four years), the reward for mining new Bitcoin shrinks. This is the deflationary mechanism of the incentive structure for those maintaining the network. Eventually, once the last of the 21 million bitcoins is mined into existence through block rewards, only transaction fees will continue to incentivize miners to secure the network.
That means the kinds of transactions allowed (and how much people are willing to pay for them) will determine whether Bitcoin thrives or declines in the coming generations. Now, the good news is that there are more than 100 years before this happens, but the immediate proposal also has fundamental philosophical outcomes that could shift who dictates that future as it unfolds.
Why this matters:
This debate is about more than protocol standards; it’s about what Bitcoin becomes after the last coin is mined in the year 2140. It’s about whether developers, investors, and node operators will create a fee environment that sustains decentralized security or leaves it vulnerable to compromise.
It matters because every future constitutional crisis is eroded or strengthened over time in the decades leading up to a critical decision point. And this time, we have the chance to hard-code future resiliency now, which ensures our future before it arrives.
What Is OP_RETURN and Why It Matters
OP_RETURN: A function in Bitcoin that allows a user to permanently record a small piece of data—up to 80 bytes—into the blockchain. This data is provably unspendable, meaning it doesn't create clutter in the network's UTXO (unspent transaction outputs) set, which is good for node health.
Think of it like stamping a message into stone and placing it into the blockchain: a quote, a hash of a document, a piece of art, hate speech, spam, or even a cryptographic receipt conversation, name-image-likeness (NIL) rights, or I.P. contracts, etc.
Why this matters (plain English):
This function enables people to use Bitcoin for more than just money—think time-stamped records, digital signatures, or verifiable event proofs. However, the size limit confines that potential within a straitjacket.
Philosophical shift in motion:
Supporters of PR #32359 believe Bitcoin should serve as a neutral base layer for all digital truth, not just money. As it has emerged as the global trustless settlement layer, they argue it should be used to create a single source of truth for more than just monetary transactions. That’s a significant shift from Satoshi’s original peer-to-peer cash system.
It is also a logical desire since Satoshi fixed the broken money problem, and it is humanly natural to want to solve other corrupted systems of information or data exchange with the same foundation. The debate centers on “how” that desire unfolds, and what the Bitcoin base layer (core code) should include, as well as what should be left to other layer 2 or adjacent codebases to solve as each new line of code to the core introduces a potential new attack vector from a security or centralized control standpoint.
New utility unlocked:
Those in favor argue that removing these limits could supercharge Bitcoin’s use in digital identity, decentralized apps, and smart contracts—each of which could generate new fee-paying transactions. That’s essential for the sustainability of the miners’ incentive structure, both before and after the block-reward era.
New risks introduced:
Uncapped data could attract spam or illegal content, increasing node costs and potentially introducing legal liability, making it more challenging for average users to run a full node and threatening decentralization.
Mining Power: Who’s Guarding the Gate?
Mining pools—cooperative groups where individual miners combine their computational power to increase their chances of earning rewards.
As of 2025, just six mining pools control over 95% of Bitcoin’s total computational power. This gives a handful of collective groups enormous influence over which transactions are included in the blockchain, in other words, what the immutable ledger considers actual and final settlement.
Why this matters (plain English):
Imagine if only six delivery companies were responsible for handling all shipping worldwide. They could delay, prioritize, or refuse to deliver packages. If they collude, they could censor content, even on Bitcoin. The near-term probability of this is extremely low. However, the inevitable unintended consequences of using the network beyond just financial gain could alter that probability and introduce this as a future risk that would have to be addressed through a hard fork of the code.
Philosophical shift in motion:
Bitcoin’s resilience depends on decentralization. As mining becomes industrialized, small miners are squeezed out, risking a future where only the most capitalized can compete.
New utility unlocked (if solved):
In anticipation of this, however, entrepreneurs at new protocols like DATUM (which decentralize block template creation), or solo mining incentives for large actors like MARA, could help reduce reliance on massive pools and restore grassroots participation.
Risks if ignored:
If centralization increases while block rewards fall, miners may prioritize only the most profitable (or compliant) transactions. This could limit Bitcoin’s censorship resistance—and hollow out the fee-based incentive model that’s supposed to take over after 2140.
Supporters of Removing OP_RETURN Limits
Supporters of PR #32359 argue that current data limits are ineffective, outdated, and inconsistent with the ecosystem's values. Miners have already bypassed them using tools like Slipstream, and other data methods, such as Taproot spam, are even more detrimental to the network. This would provide a safer and more secure way to do it, the argument goes. It’s kinda like saying if your kid is gonna drink anyway, let them drink at your house so you can monitor it and keep them from driving home afterward.
Why this matters (plain English):
Removing limits could bring order to the chaos. It's like replacing people who sneak extra luggage onto a plane with a clear, paid baggage system. Fee pressure, not protocol limits, should determine usage.
Philosophical shift in motion:
This is about protocol neutrality. Let the market decide what data is worth embedding. Let miners accept who pays for what, and let nodes filter based on their preferences.
New utility unlocked:
More reliable data anchoring for apps, decentralized identity, Layer 2 settlement proofs, and innovative automated contract execution—all of which bring more fee-paying activity to the chain. This is also a significant unlock for potential AI agent-to-agent microtransactions that will occur on-chain, rather than via a less secure network.
New risks introduced:
Data-heavy abuse could crowd out monetary transactions or even include illicit materials. Nodes may find it costlier or more intensive to operate, pushing out thousands or millions of potential grassroots participants and nudging the network toward centralization over time, unless the equivalent of a cost-effective spam filter is launched for easy node operator installation.
Connection to long-term incentives:
Every new data use case that pays fees strengthens the long-term sustainability of Bitcoin by replacing dwindling block rewards with a vibrant fee market.
Opponents of Removing OP_RETURN Limits
Critics of PR #32359 believe that lifting the limits could flood the blockchain with unnecessary data, making Bitcoin less secure and more expensive to maintain.
Why this matters (plain English):
Allowing too much baggage onto the system could make Bitcoin bloated and slow, like a public library where anyone can scribble in the books. It’s harder to find the truth in the noise.
Philosophical shift in motion:
Opponents want to preserve Bitcoin’s purity. To them, it’s a monetary system with a peer-to-peer money app, not a global settlement platform for every kind of app under the sun. Let Ethereum or Solana handle the rest and stay focused and pure.
New utility protected:
Restricting data helps keep Bitcoin fast, focused, and secure—optimizing for sound money, not general-purpose computing.
Risks if nothing changes:
Developers will continue to sneak in data using suboptimal workarounds. By not adapting, Bitcoin may miss out on hosting valuable apps, along with the transaction fees they generate.
Incentive dilemma:
Without new fee-generating use cases, there may not be sufficient economic activity to sustain mining incentives after future halving events, potentially compromising network security and leading to centralization over time.
Bridging the Divide: Seeking Middle Ground
Rather than binary outcomes, many, including me, believe compromise is possible. Here’s how we might honor Bitcoin’s roots and Satoshi’s gift to us all while expanding its branches.
Configurable Node Settings: Allow node operators to determine the amount of data to accept. Decentralized opt-in becomes the default.
Tiered Fee Structures: Make larger
OP_RETURNoutputs more expensive, discouraging spam but preserving openness.Layer 2 Anchoring: Encourage developers to build richer applications on L2s that settle data back onto Bitcoin in compact, efficient forms.
Why this matters (plain English):
We don’t need to burn down the temple or seal it shut forever. We can add side chapels for innovators while keeping the sanctum intact. We can encourage more bridging activity through BitcoinOS, similar to Cardano's recent commitment to DeFi-related activity that utilizes the Bitcoin base layer but runs its applications on another chain. Other emerging L2s with Bitcoin baselayer finality, such as Stacks, are also bridges that enable the best of both worlds.
Philosophical shift in motion:
Bitcoin can be both a base layer of monetary truth and a data settlement layer for permissionless creativity, if we manage the tradeoffs wisely.
Incentive impact:
Each compromise that brings new legitimate activity onto the chain also brings the fees that will replace mining rewards in the long run, ensuring Bitcoin survives and thrives well past its 21 millionth coin and for hundreds or thousands of years into the future.
The 21 Million Cap: Digital Gold or Fragile Myth?
Bitcoin’s hard cap of 21 million coins is sacred. It’s baked into the protocol and validated by all full nodes. Changing it would require a hard fork and an almost impossible level of consensus.
Why this matters (plain English):
Bitcoin’s fixed supply is why people trust it. Unlike fiat money, which can be printed at will (and will be on a record scale in the coming decade), Bitcoin is limited, more akin to digital real estate than currency. There will only ever be so many pre-determined divisible beachfront plots in the Bitcoin Universe.
Philosophical shift in motion:
With block rewards set to expire by 2140, some whisper about changing the cap to fund continued miner incentives. That suggestion crosses a red line for many, triggering fears of inflation and betrayal that are deeply existential. In my humble opinion, this is mostly FUD (Fear, Uncertainty, and Doubt) as the main reason anyone (OGs to noobies or wall street) wants this asset is because it is the only incorruptible supply with this mechanic in place that provides that certainty for preserving one’s wealth with digital scarcity and portability and permissionless transfer.
Utility unlocked (by staying fixed in supply):
Preserving the cap maintains Bitcoin’s store-of-value narrative, anchoring everything from national reserves to long-term retirement planning.
Risks if changed:
Altering the cap would fracture the community, undermine credibility, and likely lead to a price crash and reduced adoption. It would break the social contract Bitcoin holders have relied on—and possibly the very fee ecosystem being developed to replace mining rewards.
The Future Is Being Coded—Participate Wisely
What happens with PR #32359 is about far more than code. It’s about power, purpose, and the sustainability of the most essential monetary experiment of our era.
We’re witnessing a generational debate, not just over data limits, but over how Bitcoin will fund itself in a post-block-reward world.
Will transaction fees from real economic activity keep the lights on?
Or will shrinking rewards force hard choices—perhaps even changes to Bitcoin’s fixed supply?
Bitcoin is open-source, but it’s also open-governed. It is the truest example of global democracy we have and is the only example we have of the “People’s money”. The outcome of its future depends on you and me.
Join the conversation (Nobody can prevent you from that):
This debate will determine whether Bitcoin remains a self-sovereign and decentralized lifeboat for humanity for the next few centuries. Speak now, or someone else will code it for you.
Yours in health and wealth
~Chris J Snook
P.S. Join me (and 40,000+ others) next month in Vegas during Bitcoin 2025 (Prices go up Friday). Get yours before they do!
P.P.S. I am hosting live interview recordings with leading innovators, thought leaders, and investors during Bitcoin2025 as part of the press corps for @_btcinc. RSVP/Apply for a slot on Bitcoin Future Show! Apply for an interview slot here
Sources
Can Bitcoin’s Hard Cap of 21 Million Be Changed? – Cointelegraph
Bitcoin Core PR #32359 – Remove Arbitrary Limits on OP_RETURN
Bitcoin Arguments Go Viral Over Relaxing Core Data Storage – Protos
Restoring Decentralization with DATUM – Digital Mining Solutions
Bitcoin Nodes and Decentralization Amid U.S. Mining Control – Unlock BC
Bitcoin Developers Continue Fight Over Arbitrary Data Storage – Protos
Why Are OP_RETURN Transactions Discouraged? – Bitcoin Stack Exchange
What Happens When All 21 Million Bitcoins Are Mined? – Nasdaq