The recent Bitcoin Core v30 update, which uncapped the data size for OP_RETURN outputs, has sparked a proposal to restrict arbitrary data embedding on the blockchain due to concerns over illegal content and legal liabilities for node operators.

In response, a new proposal called BIP-444 has been introduced, suggesting a temporary soft fork lasting about a year to limit data in transactions, including capping OP_RETURN data at 83 bytes and restricting other scriptPubKeys to prevent misuse.

The proposal was authored by an individual with limited prior involvement in Bitcoin development, named Dathon Ohm, and has received support from some developers like Luke Dashjr, though it faces criticism for potentially amounting to censorship.

The debate underscores the tension between maintaining Bitcoin’s permissionless nature and addressing legal and moral concerns related to illegal content, especially as the community considers the implications of new restrictions.

Critics argue that arbitrary data embedding has existed since Bitcoin's inception and that restricting it could set dangerous precedents, risking centralization and violating Bitcoin’s core principle of permissionless use.

This proposed soft fork aims to make some transactions invalid temporarily, providing a window for developers to evaluate and develop long-term solutions for data storage issues on Bitcoin.

The proposal has not yet been formally circulated on the Bitcoin Development Mailing List but has ignited significant debate on social platforms, with community members emphasizing the importance of maintaining permissionless transactions.

This debate reflects broader questions about Bitcoin’s future: whether it should remain a neutral settlement layer or actively mitigate legal and content-related risks under increasing pressure.

Supporters see the restrictions as a necessary security measure, especially to prevent illegal content like child sexual abuse material from being stored on-chain, while opponents view it as a form of protocol censorship that could shut down popular features like Ordinals.

Supporters, including developer Luke Dashjr, argue the proposal is an emergency response to existing risks, but critics contend the risks are exaggerated and warn that such measures could set dangerous precedents for content policing.

Technical measures proposed in BIP-444 include limiting OP_RETURN data to 83 bytes, capping other scriptPubKeys at 34 bytes, restricting data push sizes to 256 bytes, invalidating unused script versions, and banning OP_IF inside Tapscripts, which would disable the Ordinals inscription method.