In the early days of bitcoin, the function OP_RETURN was used by several major blockchain networks including Counterparty, which was the 20th largest cryptocurrency in the market at its peak. The OP_RETURN function allowed developers and users to embed data into bitcoin transactions, allowing platforms like Counterparty to leverage the security of the Bitcoin network to operate an immutable data processing platform.
However, the OP_RETURN function and the capacity of the data it can hold was restricted from 80 bytes to 40 bytes, which made it challenging for Counterparty and other platforms to operate on top of the Bitcoin protocol. Ethereum first pivoted to Primecoin, before deciding to create their own blockchain.
“The very earliest versions of ETH protocol were a counterparty-style metacoin on top of primecoin. Not Bitcoin because the OP_RETURN wars were happening at the time and given what certain core developers were saying at the time, I was scared that protocol rules would change under me (eg. by banning certain ways to encode data in txs) to make it harder, and I did not want to build on a base protocol whose development team would be at war with me,” said Buterin.
He went on to explain that though it was an issue at the time, it likely did Vitalik and the Ethereum developers a favour as it led to the launch of the Ethereum blockchain: […]