Nick Szabo joins fray as controversial Bitcoin Core update nears release

Bitcoin Core developers have released the second test version of their controversial Bitcoin Core v30 update, set to usher in a new wallet format and non-monetary data inclusion sometime in October.

A new release candidate of Bitcoin Core (v30.0rc2) is available for testing, stated the Bitcoin Core Project on Sunday, labelling it as a “new major release.”

The update phases out older legacy wallet infrastructure and introduces a new simplified command system, but the main points of contention regard the policy changes around the OP_RETURN opcode, which allows embedding arbitrary data in transactions.

The expansion of data limits removes the default cap from 80 bytes to effectively unlimited, or potentially up to nearly 4 megabytes per transaction output.

Bitcoin purists vs maxis

However, Bitcoin purists believe the network should only be used for financial transactions, not data storage

They argue that extensive OP_RETURN usage bloats the blockchain permanently, as every Bitcoin node must store this data, increasing costs. It could also see the network loaded with spam and malware.

The Bitcoin maximalist argument is that if users pay fees, they should be able to use block space however they want, while market forces will naturally limit malicious usage through fees

Related: Jimmy Song slams Bitcoin Core devs for ‘fiat’ mentality on OP_Return

Bitcoin Core is supporting the update, which is expected to be deployed around late October, though the exact date remains flexible due to ongoing testing and heated debates between developers.

Nick Szabo weighs in on legal risks

Bitcoin pioneer Nick Szabo returned to X after an almost five-year hiatus with a flurry of activity and to weigh in on the debate on Sunday

He said that the network fees, which were described as the “spam filter” by developer ‘calle’, protect the miners, but they don’t provide enough disincentive to protect the full nodes

“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.”

He also said, “It’s an open legal issue almost everywhere,” suggesting that nodes could be legally responsible for harmful data stored on the blockchain

A court case highlighted by crypto litigator Joe Carlasare ruled that node operators are not liable if they don’t have knowledge or control of the data

Szabo said that one argument is that data can be hidden in other ways, but OP_RETURN data is prunable. “This suggests that allowing more data on OP_RETURN conceivably may reduce legal risks.”

However, a counterargument is that illegal content in a standard format, thus readily viewable by standard software, “is more likely to impress lawyers, judges, and jurors, and thus is legally more risky, than data that has been broken up or hidden and thus requires specialized software to reconstruct,” he said

Bitcoin pioneer Szabo returns to X to join the debate. Source: Nick Szabo
Some believe that cypherpunk Szabo is Bitcoin’s pseudonymous creator, Satoshi Nakamoto; however, he has repeatedly denied this. Szabo joined Samson Mow’s Bitcoin infrastructure company Jan3 as chief scientist in January

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