Key Notes: Cardano Founder Charles Hoskinson Weighs in on Bitcoin's New Transaction Data Handling Proposal

Key Notes

A recent proposal to change how the largest cryptocurrency, Bitcoin (BTC), handles transaction data has led to a growing debate among developers. Amid the controversy, Cardano (ADA) founder Charles Hoskinson joined the discussion by posting a simple yet impactful GIF.

The new proposal will focus on the Bitcoin OP_RETURN feature, with the controversy centered around the potential misuse of the network to store non-financial data.

Charles Hoskinson Weighs in Amid Growing Concerns

In a recent post on X, Charles Hoskinson reacted to the controversy by sharing a sarcastic GIF. His post suggested that the situation reflects warnings he has made in the past.

https://t.co/sB4KsoCzvJ pic.twitter.com/x0aZxKuGt0

— Charles Hoskinson (@IOHK_Charles) April 30, 2025

The Cardano founder made the comment after developer Jason Hughes flagged a Bitcoin Core pull request that could change the transaction relay policy. The proposed change would allow higher volumes of arbitrary data to travel across the network before it even reaches the blockchain.

According to the update, Hughes warned that this could lead to serious problems, including slower transaction times, overloaded nodes, and long-term blockchain bloat. He described the update as a risk to Bitcoin’s core purpose and stability. In his view, the most prominent digital asset must avoid becoming a tool for broadcasting large amounts of irrelevant or spam-like data.

To address the issue, Hughes recommended using Bitcoin Knots, an alternative version of Bitcoin Core maintained by developer Luke Dashjr. Bitcoin Knots applies stricter controls over what kinds of transactions can pass through the network.

Hughes also urged major mining pools like AntPool and ViaBTC to reject the proposed changes and help preserve Bitcoin’s original design principles.

It is important to note that Hoskinson’s reaction brought more attention to the issue. This is particularly significant as the Cardano ecosystem has started exploring connections with Bitcoin, including wallet compatibility. Cardano founder Charles Hoskinson recently revealed bold plans to integrate Bitcoin into the DeFi landscape.

Based on market sentiment, his public stance points to broader concerns about the direction of Bitcoin development.

Bitcoin Wallet Functionality and Key Limitations

It is worth mentioning that the technical debate has also sparked criticism over how Bitcoin wallets handle the OP_RETURN feature. Cardano DRep Psiloblox pointed out that many wallets still lack proper support for adding messages to Bitcoin transactions using OP_RETURN.

Pretty much every single Bitcoin wallet out there ignores this feature ( one of the only features BTC even has … ), but I have to ask… does your wallet support attaching messages with Bitcoin transactions via OP_RETURN ? pic.twitter.com/xTeipFOxhX

— $psiloblox :umbrella_with_rain_drops:️ PSB SSPO (@PSILOBLOX) April 29, 2025

He shared that this was a missed opportunity, especially when Cardano’s Lace wallet is preparing to support Bitcoin. Psiloblox used Moonshine wallet as an example of how OP_RETURN could be implemented effectively.

He suggested that wallets could improve the user experience by allowing text to be automatically converted into HEX format, and by adding options like QR code scanning for message entry. These additions, he said, would make the feature more accessible for users who are not technically inclined.

Regarding the development, Developer Peter Todd proposed a soft fork to restrict what can be placed in OP_RETURN fields. He recommended allowing only specific data types, like hash digests and public keys. This would make it harder to abuse the network with unnecessary content.

Looking beyond Bitcoin technical details, BitMEX founder Arthur Hayes has made an ambitious prediction for the future of BTC. He believes Bitcoin could hit $1.5 million by 2028, fueled by U.S. economic policies that increase liquidity. Currently, the largest digital asset, Bitcoin, is trading at $95,123.30, according to CoinMarketCap, but Hayes sees significant growth potential in the years ahead.

Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.

Godfrey Benjamin on X