Bitcoin Split Over Proposed Upgrade That Could Censor Transactions

Bitcoin’s community once again finds itself split over its core decentralization ideals, after leaked messages tied to Luke Dashjr, a Bitcoin developer, hinted at a possible network upgrade to censor illicit content from the blockchain.

On Thursday, Sept. 25, tech media The Rage reported that Dashjr may be considering a hard fork to create a “trusted” committee for Bitcoin. Citing leaked messages, The Rage reported that the proposed committee would have the power to retroactively scrub illegal content from the largest blockchain — a move some say could damage Bitcoin’s core principle of censorship resistance.

Dashjr rejected the claims, calling the article “fake news” in an X post on Sept. 26, shortly after the story broke. However, he hasn’t denied sending the messages published by The Rage, which the outlet says were verified by video proof.

Eyal Gruper, founder & CEO of RITREK, a platform for BTC self-custody, told The Defiant in commentary that Dashjr’s idea of a multisig committee “would break that neutrality,” adding:

Eneko Knörr, CEO & co-founder of yield-bearing stablecoin project Stabolut, noted in commentary for The Defiant that the entire debate “highlights a fundamental truth about Bitcoin in my opinion: its greatest strength is that no one is in control. Its censorship resistance is paramount.”

According to Knörr, any proposal to put a committee in charge of deciding which transactions to accept or reject “would fundamentally violate Bitcoin’s core principles of freedom and neutrality.”

As the Stabolut co-founder explained, the debate was largely fueled by the surge of Ordinals and Inscriptions, which triggered discussions on Bitcoin’s primary purpose.

“While this activity did lead to temporary network congestion and higher fees, the network has since adapted. With transaction fees having normalized, the argument for implementing such drastic and dangerous changes is no longer compelling,” Knörr said.

OP_RETURN and Illicit Content On-Chain

The debate over how Bitcoin handles non-financial data has been simmering for years. Core developers are preparing to release v30 of the reference client in October, which changes how nodes relay data via OP_RETURN, a transaction field that lets people attach small amounts of metadata such as notes or links.

Dashjr and other supporters of Bitcoin Knots, an alternative Bitcoin node client he maintains, oppose the change, warning it could make it easier for shady content to spread on the blockchain.

The underlying concern isn’t new. Back in 2018, researchers from RWTH Aachen University found that Bitcoin’s blockchain already contained non-financial content including an embedded image and hundreds of links to child abuse material, showing how the system’s data field can be misused.

“Bitcoin’s blockchain contains at least eight files with sexual content. While five files only show, describe, or link to mildly pornographic content, we consider the remaining three instances objectionable for almost all jurisdictions,” the researchers wrote in the report.

The Guardian reported at the time that even a handful of such files could make possession of the blockchain legally risky in countries like Germany, the UK, and the U.S.

Reactions to The Rage’s story from last week show just how divided the community still is. Blockstream CEO Adam Back said in an X post on Sept. 26 that Dashjr’s supposed proposal “jump[s] straight to the censorship tech” he and others had warned against.

On the other side, Udi Wertheimer, co-founder of Taproot Wizards, dismissed the report as a “sloppy low quality propaganda piece,” arguing in an X post the same day that the leaked conversation was hypothetical and mischaracterized as a hardfork plan.

The Defiant reached out to Black and Dashjr for comments but didn’t hear back by press time.

‘Attack on Bitcoin’

A closer look at the screenshots from The Rage shows why both sides are making their case. The chat comes across as technical brainstorming about zero-knowledge proofs and ways for Knots nodes to skip certain transactions, which makes it seem more like a hypothetical discussion.

At the same time, the same screenshots bring up multisig sign offs and outside legal drafting, which gives some weight to concerns about governance and censorship.

While Giacomo Zucco, an investor in OCEAN, the Bitcoin mining pool co-founded by Dashjr and financially backed by Jack Dorsey, pushed back against the article’s framing in a Friday X post, he also implied that the content of the screenshots “is nothing that Luke hasn‘t said publicly hundreds of times in the past.”

In follow-up posts, Zucco explained that the “hard fork” mentioned is theoretical, tied to hypothetical light clients using ZK proofs, and implied that Dashjr wouldn’t consider a hard fork “until he gets consensus by everyone.”

The author of The Rage article, L0la L33tz, defended her framing in a Sept. 26 post X, writing that Dashjr’s messages amount to “an attack on Bitcoin” because they concede that filters alone don’t work and propose a committee empowered to retroactively alter the blockchain.

“Let me be very clear: if Luke‘s hardfork is implemented, it opens the door for law enforcement to request the removal of other data on the Blockchain, making the implementation of KYC/AML technically feasible,” she added.