Bitcoin OP_CAT Upgrade: Can the Resurrected Satoshi Code Transform the Cutting-Edge Blockchain?

The Bitcoin developer ecosystem has been at its peak for years. Projects, tools, and proposals aimed at unlocking new decentralized applications for the OG crypto network are now part of the mainstream Bitcoin conversation.

One of the central proposals in this conversation is BIP-347, or “OP_CAT” — though called BIP-420 by some proponents — a potential soft fork upgrade that proponents say could supercharge Bitcoin’s capabilities.

At the most basic level, OP_CAT allows users to join, or “concatenate,” two pieces of data into a stack. It then places those values ​​on top of the stack, making them the first items processed in a transaction.

In theory, this gives Bitcoin greater utility. But could it even be useful, and are its benefits overstated?

“CAT makes everything better,” Bob Bodily, co-founder and CEO of Bitcoin marketplace Bioniq, told DecryptBodily’s Twitter profile picture features a Quantum Cat, an Ordinals NFT from the collection launched by Taproot Wizards in January as an advertisement for the proposed Bitcoin upgrade.

Bodily regularly posts reviews of the growing number of Layer 2 systems built on top of Bitcoin. His analysis of systems like BitVM2 highlights their advantages and limitations in breaking Bitcoin’s technical barriers, and highlights how changes to Bitcoin Core can improve these protocols.

“Take the BitVM (or BitVM2) model, and CAT makes it significantly better, more efficient, cheaper, more flexible,” he said. Between “conventions,” “vaults,” and “transaction introspection,” Bodily thinks it’s hard to think of good reasons to be against OP_CAT that stand up to scrutiny.

Still, some Bitcoin developers believe the benefits of OP_CAT are overblown. Robin Linus, co-author of the aforementioned BitVM2, published a paper in August debunking the “misconceptions” he hears from OP_CAT proponents.

Take for example conventions, which are payments that can only be executed when custom conditions are met. While OP_CAT could technically mimic conventions on Bitcoin, Linus said they would be “inefficient in terms of block space and transaction fees” and impractical next to alternative soft fork proposals specifically designed for conventions.

“I’m mostly excited about the conventions because they can remove the trusted configuration from BitVM, but I’m not a big fan of the convoluted emulation enabled by OP_CAT,” Linus said. Decrypt“But what StarkWare is doing with the Stark cats is cool.”

Linus clarified that his post was a rebuttal to claims about OP_CAT’s supposed superpowers (of which Covenants are one of the most popular) rather than the soft fork proposal itself. But he’s also historically not been a fan of the pro-OP_CAT Taproot Wizards team, whom he called “trolls” for writing “sensational” posts that “unfairly” attacked his work on BitVM.

“If promoting your soft fork requires lying, it should be rejected,” Linus tweeted last Sunday.

Asked about Linus’ criticism of covenants, Bioniq’s Bodily agreed with the substance, but noted that OP_CAT is the only soft fork proposal that could enable covenants that also has support from the “broader Bitcoin ecosystem” at the moment.

“CAT is more of a low-level primitive that benefits everyone building on top of Bitcoin,” he explained. “You get more than just conventions. But a lot of people focus only on the conventions aspect.”

What makes OP_CAT intriguing is that it’s actually an old technology. The OP_CAT opcode existed in the original Bitcoin protocol, but was removed by pseudonymous creator Satoshi Nakamoto in 2010 due to early security concerns.

For those concerned that protocol changes could disrupt Bitcoin’s stability and security, the proposal’s unique history with Bitcoin’s past is often cited to allay those concerns. It also consists of only 10 lines of code, minimizing the risk of bugs it could introduce into Bitcoin, if any.

“CAT is almost certainly 100% secure,” Paul Sztorc, author of the Bitcoin BIP 300 soft fork proposal “Drivechains,” told Decrypt“It was in earlier versions of Bitcoin, it’s now in Bitcoin Cash, it doesn’t really do much.”

“It’s also possible to turn off CAT later, like a switch, if we want,” he added. However, Sztorc said he’d like to see a successful test network and wallet with CAT implemented to see if it can truly enable the wondrous powers its proponents claim. “CAT proponents are probably overdoing it a bit,” he said.

Linus’ final criticism concerns the idea that OP_CAT will not introduce maximum extractable value, or MEV, to Bitcoin. MEV refers to the potential profit miners can earn by reordering transactions within a block, for which there are more opportunities on a programmable chain.

According to Linus, MEV would distort miners’ incentives which could potentially lead to censorship of transactions.

“The design space for OP_CAT-based token standards and DeFi applications is largely unexplored, and we cannot anticipate all the innovations that may emerge and how they will impact MEV,” he wrote.

If OP_CAT were to cause friction, Bodily argues that the soft fork would also allow Layer 2 Bitcoin networks to migrate these expressive transactions off-chain. “Who wants to build and transact on Bitcoin L1 when they can just go straight to a L2 to do it cheaper, faster, and better?” he asked.

Atomic Finance CEO Tony Cai added that this was the only point Linus made that he disagreed with, given that MEV “already exists on Bitcoin.”

“Since the creation of token standards like Runes/BRC-20, MEV has already started to exist on BTC,” he said Decrypt. If developers decide to build computationally expensive applications on Bitcoin L1, such as automated market makers (AMMs), they will likely remain unused because the network is too slow and expensive to make them practical, he added.

“The user experience would be horrible,” he said.

Edited by Ryan Ozawa.