A renewed debate over Bitcoin’s transaction relay policy has caught the attention of Cardano founder Charles Hoskinson, amid rising concerns over the use of non-financial data on the blockchain.
The discussion centers on OP_RETURN, a Bitcoin feature that allows users to attach small pieces of data to transactions, and a recent Bitcoin Core proposal that could potentially enable high volumes of arbitrary data through the network, challenging the protocol’s original design.
Hoskinson responded to the ongoing discourse by sharing a GIF suggesting that current developments are aligning with his past predictions.
https://t.co/sB4KsoCzvJ pic.twitter.com/x0aZxKuGt0
— Charles Hoskinson (@IOHK_Charles) April 30, 2025
This response comes as part of a broader conversation about the interoperability between Cardano and Bitcoin, particularly in the context of wallet functionality.
Bitcoin Core Proposal Sparks Concerns
Hoskinson’s sarcastic response was in response to Jason Hughes, a notable voice in Bitcoin development, who flagged a pull request affecting Bitcoin Core’s transaction relay policy. According to Hughes, the proposed changes could allow gigabytes of arbitrary data to be relayed across the network before reaching the blockchain.
This could strain individual nodes, slow transaction processing, and expand blockchain size—an issue he described as blockchain bloat.
To address these risks, Hughes recommended Bitcoin Knots, a version maintained by developer Luke Dashjr. He argued that this alternative enforces stricter rules and avoids more permissive transaction validation. Hughes also urged major mining pools such as AntPool and ViaBTC to reject the proposed Bitcoin Core update to safeguard the network’s intended functionality.
Mixed Reactions from Developers
This is not the first time Hoskinson has reacted to this debate. Hoskinson’s initial involvement followed a post by Cardano DRep Psiloblox, who criticized the limited support for OP_RETURN in most Bitcoin wallets.
The criticism surfaced as Cardano’s native wallet, Lace, moved to integrate Bitcoin support. Psiloblox highlighted missed opportunities in current Bitcoin wallet designs, especially the absence of features allowing users to embed messages in transactions.
To illustrate the point, Psiloblox referenced a past request for Bitkit to introduce an OP_RETURN message field, suggesting that it auto-convert text into HEX for ease of use. He mentioned Moonshine wallet as a platform that already offers this feature. Additionally, Psiloblox proposed including a QR code scanning option for OP_RETURN fields, aiming to boost user experience and accessibility.
Possible Protocol-Level Restrictions
In further response to the controversy, developer Peter Todd weighed in with suggestions on minimizing non-financial data inclusion in Bitcoin blocks. While he acknowledged that Bitcoin Knots adopts a more cautious approach, he noted it still permits spam-like transactions under current rules.
To further mitigate these issues, Todd proposed a soft fork introducing new transaction constraints. These rules would permit only hash digests or public keys, increasing the computational cost of inserting irrelevant data. However, he clarified that this would not eliminate all forms of spam, especially those related to token trading activities.
