The Bitcoin Core vs Knots Fight Asks What's Worse: ‘Censorship’ or ‘Spam’?

The Bitcoin Core vs. Bitcoin Knots debate centers on whether prioritizing censorship resistance by allowing more data in blocks or implementing spam filters to protect Bitcoin's payment functionality is the lesser of two evils.

• Bitcoin Knots advocates for strict data filtering to preserve Bitcoin's payment function and prevent UTXO bloat.

• Bitcoin Core proposes relaxing `OP_RETURN` limits, seeing filtering as futile and less harmful than current data embedding methods.

• The debate highlights the tension between maintaining censorship resistance and controlling undesirable data on the Bitcoin blockchain.

The Bitcoin Core versus Bitcoin Knots debate revolves around defining and managing 'spam' on the blockchain, particularly non-transactional data like ordinals or BRC-20 tokens. Bitcoin Knots advocates for stricter filtration of such data to preserve Bitcoin's primary use case as a payment system and prevent issues like UTXO set bloat. Conversely, Bitcoin Core proposes relaxing the `OP_RETURN` data limit, arguing that attempts to filter spam are ultimately futile in a censorship-resistant network and that formalizing data storage in `OP_RETURN` is a 'less bad' option compared to alternative, more harmful embedding methods.

Spam Definition Debate

• 00:02:24 The definition of 'spam' in the Bitcoin context is contentious. Adam Back defines 'unambiguous spam' as image data like ordinals, but acknowledges a 'gray' area for layer-two meta-protocols. Chris Guida, representing Bitcoin Knots, defines spam as any data storage on the blockchain that deviates from Bitcoin's intended use for payments, arguing that such data competes with and can 'crush' the payment use case.

Impact of Spam on Bitcoin

• 00:07:08 Harmful data on the blockchain, particularly from altcoin ponzi schemes like BRC-20, causes 'UTXO set bloat,' which slows down initial block download (IBD) and increases the cost of running a full node. This also leads to high transaction fees, crowding out legitimate payment use cases, especially those using Lightning Network, thereby threatening Bitcoin's primary function as money.

The OP_RETURN Limit Proposal

• 00:14:11 The core of the debate is Bitcoin Core's proposal to effectively raise or remove the `OP_RETURN` data limit, currently 83 bytes, to potentially one megabyte or more. Core argues this is a reactive measure to developers already embedding data in more harmful ways (like fake public keys) and aims to incentivize less damaging storage methods, even if data isn't entirely prevented.

Effectiveness of Filters

• 00:34:20 The efficacy of transaction filters is a major point of contention. Chris Guida asserts that the `OP_RETURN` filter has been 'wildly successful,' reducing large `OP_RETURN` confirmations by over 99%. Adam Back argues that filters are unreliable in a censorship-resistant network, citing instances like 'full RBF' and 'sub-1-sat per vbyte' transactions where policies were bypassed, demonstrating that strong economic incentives can render filters ineffective.

Sustainability of Mining Fees

• 00:36:11 Some argue that Core's change will make mining more sustainable by increasing transaction fees, but both Adam Back and Chris Guida view this as a 'red herring.' Chris believes fears of low fees destroying mining are exaggerated, noting that the block subsidy is currently far larger than fees. He maintains that prioritizing data over payments fundamentally shifts Bitcoin's purpose away from being money.

Censorship Resistance vs. Spam Control

• 00:45:07 The debate also touches on the balance between censorship resistance and spam control. Adam Back states that complete spam cessation is impossible in a decentralized, censorship-resistant system like Bitcoin, and attempts to filter often lead to worse outcomes as spammers find new methods. Chris Guida counters that spam filtration is distinct from censorship and is effective, citing historical instances where a 'hostile' stance deterred spammers, reinforcing that the 'cat and mouse game' can be won by proactive filtering.