Bitcoin News Today: Bitcoin v30 Ignites Clash: Data Bloat vs. Legal Risks in Decentralization Battle

Bitcoin Pioneer Nick Szabo Urges Users to 'Run Knots' and Skip Core v30 – Crypto News

The Bitcoin community faces a pivotal debate as the Bitcoin Core development team prepares to release version 30 of its software, a major update that has reignited tensions between purists and maximalists. Nick Szabo, the influential cryptographer and conceptual architect of "bit gold," has returned to public discourse after a five-year absence, criticizing the v30 update for its potential to exacerbate legal risks and economic imbalances. Szabo's intervention underscores a broader philosophical divide over Bitcoin's role as a payment system versus a decentralized data storage platform.

Central to the controversy is the v30 update's relaxation of rules around the OP_RETURN opcode, a feature that allows non-financial data to be embedded in transactions. The new version removes the 80-byte limit per transaction output, effectively permitting up to 4 megabytes of data. While maximalists argue this aligns with Bitcoin's permissionless ethos-letting users pay fees to utilize block space as they see fit-purists warn of inflationary risks to the blockchain. They caution that excessive data storage could bloat the ledger, raise infrastructure costs, and enable spam or malicious content, undermining Bitcoin's efficiency as a payment network.

Szabo's critique extends beyond technical concerns to legal vulnerabilities. He highlights a growing asymmetry between miners, who profit from transaction fees, and node operators, who bear the costs of storing and validating data without commensurate protections. Szabo argues that the v30 update could increase legal exposure for node operators, particularly if embedded data includes illicit content. While a 2022 court case ruled nodes are not liable for unknown or uncontrollable data, Szabo warns that standardized, human-readable formats in OP_RETURN transactions could make operators more culpable in legal proceedings. "Contiguous data is more likely to impress lawyers, judges, and jurors," he stated, emphasizing the practical risks of visibility over obfuscation.

The debate has also drawn attention to Bitcoin Knots, an alternative node implementation that retains stricter data limits. Szabo's advocacy for running Knots has gained traction among node operators concerned about decentralization and legal risks. Bitcoin Knots' node count has surged to over 4,700 as of June 2025, a 638% increase since early 2024, reflecting growing dissatisfaction with Core's direction. Critics of v30 argue that the update's deprecation of user-configurable data limits and its shift toward larger payloads could centralize the network by pricing out smaller operators and favoring institutional infrastructure.

The v30 update's implications are further complicated by regulatory developments, such as California's AB 1052 law, which could classify dormant Bitcoin as unclaimed property. Szabo linked this to recent movements of $44 million worth of BTC from a 2013 address, suggesting users may be preparing for legal uncertainties. The interplay of technical upgrades, regulatory scrutiny, and market dynamics has intensified as the October 2025 release date approaches. While Core developers defend the update as a necessary evolution to reduce spam and align with market forces, Szabo and his allies view it as a threat to Bitcoin's foundational principles.

As the Bitcoin community grapples with these challenges, the outcome of the v30 debate will shape the network's trajectory. The controversy encapsulates broader tensions between innovation and preservation, scalability and security, and decentralization and compliance. With Szabo's intellectual authority and the rise of alternative implementations like Bitcoin Knots, the coming weeks will test the resilience of Bitcoin's consensus-driven governance model.