The most intense governance crisis in Bitcoin history! The BIP-444 proposal aims to pause Ordinals, and the community is engaged in heated debate.

A new Bitcoin Improvement Proposal (BIP-444) was released last Friday, aiming to temporarily limit the inclusion of arbitrary data in Bitcoin transactions through a one-year soft fork. This proposal responds to concerns that the recent Bitcoin Core v30 update could lead to the permanent storage of illegal content (such as CSAM) on the blockchain. Its measures include limiting the size of OP_RETURN and script output data, as well as disabling OP_IF in Tapscript (which would effectively undermine Ordinals inscriptions). This proposal has sparked the most intense governance debate since the block size controversy, with critics accusing it of “protocol-level censorship” and “crisis theater,” while supporters see it as an “emergency response” to protect node operators from legal risks and maintain Bitcoin's decentralization model.

BIP-444 Ignites Controversy: Bitcoin's “Survival Threat”?

The core controversy of the BIP-444 proposal stems from the Bitcoin Core v30 update. This update removed the data size limit on OP_RETURN outputs, which is part of the Bitcoin script used to attach auxiliary data. While users have long embedded information and metadata on-chain, the new interpretation allows for writing much larger data payloads, provided that sufficient transaction fees are paid.

Permanent storage of illegal content and legal risks

Critics are concerned that this could lead to illegal files (such as Child Sexual Abuse Material, CSAM) being permanently stored on the Bitcoin Blockchain, thereby exposing node operators to criminal liability simply for participating in the network, which poses a “direct existential threat” to the decentralization model of Bitcoin.

The proposal warns that if node operators are forced to choose between violating the law or shutting down their infrastructure, the verification work may become concentrated in the hands of a few legally protected institutional nodes, fundamentally undermining the core trust assumptions of Bitcoin.

Proposed Temporary Technical Restrictions

To mitigate this risk, BIP-444 proposes several temporary technical measures:

• Limit the size of OP_RETURN data to 83 bytes.
• Limit the output size of most scripts to a maximum of 34 bytes.
• Limit the data push size to 256 bytes.
• Disable unused or undefined script versions.
• Limit the size of the Taproot control block.
• Disable the OP_IF opcode internally in Tapscript (this will effectively break the Ordinals style inscription).

The last point is the most explosive: Ordinals inscriptions (a technology that directly stores NFT-style digital artworks on the chain) have significantly driven the use of block space and miner fee revenue over the past two years. This soft fork will temporarily shut down the Ordinals market, with supporters believing this is a necessary safety diversion, while opponents view it as censorship at the protocol level.

Ideological Conflict between Supporters and Opponents

This governance debate reveals profound divisions within the Bitcoin community regarding its core purpose and purity.

The boundary between “emergency response” and “review”

• Supporters' Position: Supporters, including veteran developer Luke Dashjr, view this move as an urgent “emergency response” rather than a philosophical shift. They believe that the blockchain is already at risk due to the large data transactions mined earlier this month.
• Opponents rebut: Critics argue that the “emergency” narrative has been exaggerated, pointing out that Bitcoin has theoretically been able to store harmful data for a long time, and there is currently no widely accepted legal precedent linking the operation of nodes with the responsibility of holding (illegal content).

Opponents (including members of the Ordinals community) warn that the proposal could set a dangerous precedent, blurring the line between network integrity protection and content regulation. Some even warn that if miners and users disagree on activation issues, the network could face risks similar to the Bitcoin/Bitcoin Cash split in 2017.

In addition, the proposal was written by an anonymous contributor with no public development history, further intensifying the community's doubts about its coordination, intent, and legitimacy. Currently, BIP-444 has not yet been formally submitted to the Bitcoin development mailing list, which is the necessary next step for any formal path to consensus.

On-chain activities reveal market changes: long-term holders are taking profits.

While intense debates around BIP-444 are taking place in the developer community, Bitcoin (BTC) on-chain activities also show a deep restructuring among holders.

Sleeping Wallet Awakens and Liquidity Decreases

On-chain analysis data indicates that since mid-October, tens of thousands of Bitcoins valued at approximately $7 billion have been withdrawn from long-dormant wallets. This marks the first major wave of dormant coin activity in the second half of 2025, coinciding with the Bitcoin price retracing from a record high of $125,000 to around $113,000.

Analysts interpret this as a shift in market behavior. Small and medium-sized holders are reducing their positions, while “whale” wallets holding tens of millions of dollars in BTC are quietly increasing their holdings. This indicates that patient long-term investors are taking profits, while financially strong participants are positioning themselves for what they see as the next accumulation phase.

At the same time, the share of Bitcoin supply considered “non-liquid” (i.e., locked in wallets with little spending history) has slightly decreased. This has raised concerns that the momentum for price increases may weaken unless new demand arises. However, according to data from market trackers, more than four-fifths of circulating Bitcoin is still in profit, and overall profitability remains high. A report by Fidelity Digital Assets predicts that the scarcity of Bitcoin will intensify over the next decade, with nearly half of Bitcoin potentially becoming non-liquid assets by 2032, and points out that regulatory progress and interest from sovereign nations may exacerbate this long-term supply tightening.

Conclusion

The controversy surrounding BIP-444, the awakening of dormant coins, and the entry of giant whales together reveal the dual turmoil that Bitcoin is currently experiencing in both economic and ideological terms. This debate over “data purity” tests Bitcoin's ability to adapt under pressure and its positioning as either a neutral settlement layer or a system that must mitigate real-world legal risks. Ultimately, the evolution of Bitcoin is not only about code and supply but also about humanity's belief in decentralization and financial freedom.

Disclaimer: This article is for news information only and does not constitute any investment advice. The cryptocurrency market is highly volatile, and investors should make decisions with caution.