Writing Custom Messages on Bitcoin’s Blockchain Using OP_RETURN

OpenAI DALL-E3 by Author

Bitcoin’s OP_RETURN opcode provides a standardized method for embedding arbitrary data into transactions, enabling on-chain messaging, notarization, and asset issuance without increasing the UTXO set size. Before OP_RETURN, users attempted to write messages into Bitcoin using inefficient techniques that resulted in UTXO bloat—unspent transaction outputs that full nodes had to store indefinitely.

In this article, we will explore the mechanics of OP_RETURN, its historical context, limitations, use cases, and a technical breakdown of how to create and analyze OP_RETURN transactions.

Bitcoin Transactions Recap: Inputs, Outputs, and UTXOs

A Bitcoin transaction consists of:

1. Inputs—References to previous unspent transaction outputs (UTXOs) that are being spent.
2. Outputs—Newly created outputs that direct BTC to a recipient or perform another function.

Each output contains:

• A value (in satoshis)—The amount of BTC assigned to the output.
• A locking script (scriptPubKey)—A Bitcoin Script program defining the conditions required to spend the output.