Ordinals Dev Floats Forking Bitcoin Core Amid Censorship Concerns
News Summary
An Ordinals developer, Leonidas, has threatened to fund an open-source fork of Bitcoin Core if developers attempt to censor Ordinals, Runes, and other non-financial transactions on the network. This warning comes amidst an ongoing debate within the Bitcoin community regarding whether node validators should prioritize peer-to-peer financial transactions and censor or ignore large data transactions like images and videos, which critics deem spam. Leonidas stated that any tightening of policy rules or censorship of Ordinals and Runes would set a "dangerous precedent" and trigger "decisive action." He highlighted that the Ordinals and Runes ecosystems have contributed over $500 million in transaction fees, enhancing Bitcoin's security, which is increasingly critical as the block subsidy continues to halve. He claims to have spoken with miners representing over 50% of Bitcoin's hash rate, who affirmed they would accept any transaction as long as fees are competitive. However, the article also notes the unpredictable and seasonal nature of Ordinals activity, making fee reliance challenging. For instance, Bitcoin miners earned only $3,060 from Ordinals on August 31, 2025, a stark contrast to the daily record of $9.99 million on December 16, 2023, suggesting current blockspace usage is lower. Concurrently, Bitcoin Knots, an alternative to Bitcoin Core, has seen a significant surge in popularity, now accounting for over 18% of the network's nodes.
Background
Bitcoin Core is the predominant software client for the Bitcoin network, responsible for validating transactions and maintaining the blockchain. Ordinals and Runes protocols enable users to inscribe or create non-financial data, akin to NFTs and fungible tokens, directly onto the Bitcoin blockchain. While these operations have increased network transaction volume and fee revenue, they have also sparked debate about whether they deviate from Bitcoin's original vision as a "peer-to-peer electronic cash system." Bitcoin miners derive their revenue primarily from newly minted bitcoins (block subsidies) and transaction fees. With block subsidies halving approximately every four years (most recently in 2024), transaction fees are becoming an increasingly significant component of miners' total income. Tensions within the community stem from differing interpretations of network utility, decentralization principles, and censorship resistance.
In-Depth AI Insights
How might the threat of a Bitcoin Core fork reshape the power dynamics of Bitcoin governance? - The threat of a Bitcoin Core fork, whether realized or not, highlights the complexities and inherent tensions within Bitcoin's decentralized governance. It signals a shifting power balance among core developers, miners, and users, where users (through running different clients or supporting specific protocols) gain greater influence. - This threat forces core developers to reconsider policies that might be perceived as censorship, as it risks network fragmentation and hash rate dispersion. It is not just a defense of Ordinals but a reassertion of the core principle that "Bitcoin must always remain censorship resistant," potentially leading to more cautious and inclusive future protocol upgrades and policy decisions. What are the long-term investment implications for the Bitcoin mining industry, given the unpredictable nature of Ordinals transaction fees and their impact on miner revenue? - While Ordinals offer a significant potential source of transaction fees, their volatility and seasonality present challenges to miner revenue stability. In the long run, miners will require more robust financial management and hedging strategies to navigate this uncertainty. - Investors should look for mining companies that can diversify revenue streams (e.g., offering energy services, hosting, or other blockchain infrastructure services) or possess exceptionally low operating costs to survive periods of low transaction fee revenue. This could accelerate consolidation within the mining industry, weeding out less efficient players, and driving technological innovation to reduce energy consumption. What does the planned removal of the 80-byte limit on OP_RETURN in Bitcoin Core v30 signify for Bitcoin's future functionalities and potential risks? - The removal of the 80-byte limit on OP_RETURN will allow for significantly more data to be stored on-chain, potentially further enabling protocols like Ordinals and Runes, and possibly unlocking new use cases that could boost network transaction volume and fee revenue. - However, this also risks exacerbating concerns about "on-chain congestion" and "bloat," increasing node running costs and synchronization times, potentially harming decentralization. Investors should assess how this change impacts Bitcoin's utility as both a store of value and a medium of exchange, and its effect on the adoption rate of Layer-2 solutions like the Lightning Network.