Subject: [bitcoindev] Re: Relax OP_RETURN standardness restrictions

From: Greg Maxwell <[email-masked]>
Date: Thu, 1 May 2025 23:29:35 -0700 (PDT)

On Thursday, April 17, 2025 at 7:09:23 PM UTC Antoine Poinsot wrote:

Since the restrictions on the usage of OP_RETURN outputs encourage harmful 
practices while being ineffective in deterring unwanted usage, i propose to 
drop them. 

The situation is even somewhat worse than that:  There are a number of 
design decisions where it's generally assumed that relay and mining policy 
generally match, or at least that mismatches are short lived.

When relay policy is more restrictive than what is actually being mined 
there are at least two serious negative effects.

The first is that the latency of block propagation is greatly harmed,  a 
single missed transaction causes a tripling of the per hop transmission 
delay.  If the missed transaction(s) are larger than the TCP window then 
the increase may be many round trip times.  Also if the missed data is 
large the currently unused prefill mechanism in compact blocks wouldn't 
help (and would instead likely make things worse as then nodes will get 
several times the same transaction data from different peers and you cannot 
decode the compact block until all the prefill data has been received due 
to the message checksum.  Delays in block propagation can have a 
disproportionate effect on mining centralization because they cause larger 
miners to have improved profitability over smaller ones. This happens 
regardless of which party was on which side of the delay, no matter which 
side is delayed its the smaller miner's expected profits that are 
diminisned and the nature of mining competition means that less profitable 
miners go bankrupt.

This also encourages the establishment of direct miner submission which can 
undermine the permissionless nature of bitcoin and in particular again 
shifts profits towards larger miners because e.g. few would bother 
connecting to a 1% miner's direct submission interface (if they could even 
afford to make one).

There are also a number of less significant harms, e.g. more restrictive 
relay policy makes fee estimation less accurate/complete (though at least 
estimation is designed to be fairly robust in that direction). 

So on this basis I suggest a principle for these sorts of policy:   Relay 
rules should admit all transactions which are reliably being mined.

I think node software should adopt this principal as a general rule.

Admitting the transactions is not endorsing them, it's just a recognition 
of reality.  This policy or equivalent is also the requirement to not 
suffer from the downsides of relay being more restrictive than mining.   If 
we imagine that a miner is mining some kind of harmful attack transaction 
e.g. a validation DOS attack, then the miner needs to be convinced to stop, 
the implementation changed to not have bad performance, and/or consensus 
rules must be changed ... but relay policy can't address it.

By general rule I mean that should something like a miner begin mining e.g. 
quadratic hashing bloat legacy txn, or using unused 
opcode/successcode/version number or whatever by mistake or technical 
ignorance there is no need to rush off enabling their relay. A general rule 
isn't a suicide pact.  But if it were the case that transactions misusing a 
particular forward compatibility feature were reliably getting mined then 
that feature would just no longer be useful for forward compatibility 
regardless of what relay policy says about it and it would be better to 
relay them than have the downsides of not doing so.

As Antoine Poinsot points out, the existent rule is entirely ineffectual:  
Parties current bypass these rules with other transaction forms (such as 
very harmful address stuffing which is impossible to block) or by direct 
miner submission, which will continue considering the millions of dollars 
miners have received mining transactions with violate the relay rules.  
Because of this it will not become effectual with time or tweaking.  It is 
a dead parrot^policy.  This is no surprise, since it's a product of 
Bitcoin's anti-censorship properties that *generally* filtering will not 
work except on the fringes.  As such there isn't practical upside to 
keeping filtering beyond what miners currently perform. 

Some Bitcoiners are of the opinion that they still want a knob, I think 
doing so is a disrespectful placebo[*] but I don't have a strong opinion if 
an option remains-- the code is safer and cleaner without some filtering 
rules that few users would use but that really just a question between 
software maintainers and users.  That said, Bitcoin core has generally not 
had knobs to adjust relay policy as distinct from mining policy in large 
part because of the design assumption that the two need to be the same.  
But in this case if there were a knob here I think would make more sense 
for it to control mining policy rather than relay policy, since it would 
actually have some effect in the mining context (in excluding the txn from 
your own blocks) while as a relay only thing it is impotent.

[*] It doesn't even conserve their resources meaningfully.  They'll still 
receive and process the txn, then discard.  Then they likely have to fetch 
it a second time when it shows up in a block.  Although they may save 
re-transmitting it, on average network wide each transaction is sent once 
and received once so the extra transmission for the block should offset the 
relay savings.

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