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Italian academics have released research warning aboutthe growing useof non-monetary use cases for the Bitcoin
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Italian academics have released research warning about the growing use of non-monetary use cases for the Bitcoin blockchain.
‘Negative Effects’ on Bitcoin Network
The research, authored by Massimo Bartoletti and Livio Pompianu from the University of Cagliari, Italy, focuses on the multiple use cases for Bitcoin that extend beyond its most basic function, the transfer of value.
Dubbed “An analysis of Bitcoin OP RETURN metadata,” it investigates the use of one of Bitcoin’s transaction fields, the OP_RETURN metadata feature. Introduced in 2014, it allows the data to be broadcast and recorded on the blockchain without the need for it to be calculated, thus saving time and computing power.
Since then, many projects have come to use the feature as a means to store information and to power decentralized applications on the blockchain, leveraging its transparency and immutability.
The practice, however, is discouraged by some members of the Bitcoin community and has become one of the many points of debate regarding the scalability of the virtual currency.
The research paper reads:
A point of debate in the Bitcoin community is whether loading data through OP RETURN can negatively affect the performance of the Bitcoin network with respect to its primary goal.
Innovation to Take Its Toll On Bitcoin?
Since its introduction, the OP_RETURN feature has been used by many projects in order to build decentralized applications on the blockchain, leveraging its transparency, immutability and the security provided by Proof-of-Work.
Although the OP_RETURN metadata storage is currently limited to a maximum of 83 bytes per transaction, data can be divided in multiple transactions. These currently occupy 0.03% of the blockchain space and represent 0.92% of all transactions in the blockchain, which is a considerable figure given that the feature was only released in 2014.
The research paper continues that there is growing interest in the use OP_RETURN metadata, which has been steadily increasing since March 2015 and that this practice may have unforeseeable consequences in the Bitcoin network.
“We think that the main motivation for not using cheaper and more efficient storage is the perceived sense of security and persistence of the Bitcoin blockchain,” it states.
If this trend will be confirmed, the specific needs of these applications could affect the future evolution of the Bitcoin protocol.
Metadata in Fashion
The metadata feature is currently used by mainstream projects like CounterParty and Omnilayer to issue and transfer assets on the Bitcoin blockchain. These can represent ownership of a certain commodity, asset, stock, etc. Well-known assets issued on the Bitcoin blockchain include BitCrystals, FoldingCoin and Tether.
The immutability of the blockchain is leveraged through this feature by projects like Factom and BitProof to assert the validity of certain documents by establishing timestamps and propriety of a certain document. This category is the one that takes up the most space.
Other use cases include the stipulation of access rights and/or copyright to digital art files and permanent messaging on the blockchain.
Can OP_RETURN pose a serious problem for Bitcoin? Will the blockchain scale to allow these projects to use it freely? Let us know in the comments below!
Images courtesy of Shutterstock, unica.it
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