- OP_CAT Update
- The “new” is just a well-forgotten old
- A “simple” addition with great potential
- Skeptics are opposed
- Sidechains are not enough to support Bitcoin blockchain development
The OP_CAT code is not just an improvement; it’s a lifeboat
A single unused line of code, deeply embedded in Bitcoin’s core, potentially opens the door to a range of new features that could position the Bitcoin network as a competitor to Ethereum in the realm of decentralized finance (DeFi).
OP_CAT Update
The “OP_CAT” update (for Operation Code Concatenate) involves restoring code lines originally embedded in the blockchain by its founder, Satoshi Nakamoto. This code was part of Bitcoin’s initial scripting system, significantly enhancing the utility of Bitcoin transactions and broadening the variety of operations users could perform with Bitcoin.
However, Nakamoto was concerned that the OP_CAT code could expose the Bitcoin network to security risks, including denial-of-service (DoS) attacks and the creation of exponential memory demands, potentially overloading the network.
As a result, in 2010, Nakamoto removed OP_CAT from the active operation codes as part of a broader effort to simplify and improve Bitcoin’s reliability.
The “New” is Just a Well-Forgotten Old
In October 2023, cryptographer Ethan Heilman and Botanix Labs’ lead engineer Armin Sabouri revived the idea of OP_CAT, proposing to reintroduce this operation code into the Bitcoin network through a soft fork.
If approved, the update will bring many new features to the network, including accumulating data and extending Bitcoin TapScript and its smart contract-like functionalities. Since then, the idea of reinstating OP_CAT has quickly gained traction, not only among Bitcoin enthusiasts but also within the broader developer community.
On April 25, OP_CAT was submitted as Bitcoin Improvement Proposal (BIP) 327, marking the first concrete step toward implementing and adopting this software upgrade.
A “Simple” Addition with Great Potential
StarkWare CEO Eli Ben-Sasson stated that his goal is to help scale the Bitcoin network to handle thousands of transactions per second and make Starknet the first network to operate simultaneously on both, Bitcoin and Ethereum.
According to Ben-Sasson, the approval of OP_CAT — which would enable staking, agreements, fraud protection, and STARK scaling — is the key to achieving true scalability for Bitcoin.
Skeptics are Opposed
Not everyone is convinced that OP_CAT is necessary for Bitcoin’s long-term growth, arguing that the current sidechain structure is already sufficient to scale Bitcoin.
Bart van der Wurt, Strategy Director at Bitcoin liquid staking protocol pSTAKE, stated that OP_CAT may pose an unnecessary risk, given the relative success of Bitcoin sidechains in scaling the network to date.
Bitcoin sidechains include networks like CORE, Stacks, BitLayer, and bSquared. These are independent blockchains operating alongside the Bitcoin network, hosted on the Ethereum Virtual Machine (EVM), and using bridges to transfer assets between them and the parent network.
CORE — like other Bitcoin sidechains — allows Bitcoin users to pool their idle BTCs into its CORE DAO protocol and earn income from BTC that would otherwise sit passively in a cold wallet.
Sidechains are Not Enough to Help Bitcoin Blockchain Development
Labrys founder Lachlan Feeney holds a different perspective, arguing that sidechains do not offer sufficient innovation or security to make them attractive to users.
Feeney stated that most current Bitcoin Layer-2 networks are essentially just L2 networks running EVMs with overhyped bridges often mischaracterized as Bitcoin Layer-2 solutions.
“Many of these projects are even based on Ethereum and have a bridge to Bitcoin. While they are technically compatible with Bitcoin, they cannot truly be called real Bitcoin L2 networks.”
This, according to Feeney, is the core issue. Since the current crop of Bitcoin sidechains is not natively linked with the network, they fail to create the positive feedback loop of activity necessary for Bitcoin to meaningfully compete with Ethereum in the future.
“All the sidechains being proposed now are just quick, short-term fixes. The only way Bitcoin DeFi will grow larger than Ethereum DeFi is if major Bitcoin whales move their capital and connect it to the protocols. To achieve this, you need to move toward creating a legitimate trustless environment, and the OP_CAT code will undoubtedly play a significant role in that process.”
The OP_CAT Code is Not Just an Upgrade, It’s a Lifeboat
Feeney doesn’t just see OP_CAT as a cool upgrade for Bitcoin that could enable DeFi and other functionalities; he believes it is a critical component for the network’s long-term survival.
Both critics and proponents of Bitcoin are concerned that the network will eventually reach a point where it can no longer sustain itself under its current economic model.
Currently, Bitcoin relies almost entirely on miner rewards and fees. Unless we imagine an idealistic and highly unlikely scenario where BTC’s price doubles perfectly every four years, block rewards will not be able to sustain interest in maintaining the network’s security indefinitely.
“Bitcoin cannot survive in the long term as it exists today. It needs a thriving L2 ecosystem,” said Feeney.
“At the extreme, over 90% of miner revenue today comes from block rewards. Eventually, block rewards will run out, and there will be no more block rewards. Miner revenue will then have to come from transaction fees. So ultimately, you’ll reach a point where Bitcoin must sustain itself through transaction fees, or it will die.”
“Many people think this is something that will happen in 100 years, but in reality, it will happen in just one or two more halvings, when block rewards become so small that they are insufficient to maintain network security, meaning transaction fees will need to rise significantly,” he added.
“Bitcoin’s options are: either it fails to build an L2 ecosystem and dies, or it develops a thriving L2 ecosystem where L1 becomes a settlement chain and flourishes.”
