Bitcoin Core vs Knots: The High-Stakes Battle That Could Split Bitcoin’s Future

The Bitcoin network faces a critical decision. Two competing visions threaten to fracture the world’s first cryptocurrency. The Bitcoin Core vs Knots debate has exploded from technical forums into a full-blown ideological war.

What began as a disagreement about data limits has evolved into something far more serious. With Bitcoin Core v30 released in October 2025 and Bitcoin Knots nodes now controlling approximately 20% of the network, the stakes couldn’t be higher.

What Is Bitcoin Knots?

Bitcoin Knots is an alternative Bitcoin node implementation maintained by developer Luke Dashjr, CTO at Ocean Mining. The software gives node operators stricter control over transactions.

Knots enforces a 42-byte limit on OP_RETURN data, dramatically smaller than Core’s approach. It can filter inscription-style content and what supporters consider “spam” transactions. The implementation embodies a philosophical stance that Bitcoin should focus exclusively on monetary transactions.

Why the Bitcoin Core vs Knots Controversy Exploded

The crisis erupted after Bitcoin Core v30 removed the 80-byte limit on OP_RETURN transactions. Now users can attach up to 100,000 bytes of arbitrary data to Bitcoin transactions.

OP_RETURN is a Bitcoin script operation that allows embedding non-financial data directly into the blockchain. Originally introduced in 2014 with an 80-byte cap, it was designed as a compromise.

Bitcoin Core’s Position

Core developers like Peter Todd defend the change on several grounds. Bitcoin should remain permissionless. If users pay fees, they should use block space however they choose.

Removing the limit improves efficiency. Projects previously worked around restrictions by creating multiple unspent transaction outputs, which bloats the UTXO set. OP_RETURN outputs can be pruned, making them less resource-intensive.

Jameson Lopp stated, “I truly detest politics. Thus, I have little patience for those who try to impose traditional governance models onto Bitcoin.”

Bitcoin Knots’ Concerns

Luke Dashjr and Knots supporters see the situation differently. Their concerns include:

Blockchain Bloat: Larger payloads increase blockchain size, making node operation more expensive and pushing out smaller operators.

Legal Liability: If illegal content gets embedded on-chain, node operators might face prosecution. This existential threat could destroy Bitcoin’s decentralization.

Spam and Fee Markets: Non-financial transactions crowd out legitimate payments and distort fee markets.

Mission Drift: Bitcoin was designed as peer-to-peer electronic cash, not a general-purpose database.

Network Statistics: Explosive Growth

As of September 2025, Bitcoin Knots powers approximately 20% of all public Bitcoin nodes (over 4,200 nodes), according to Coin Dance tracking data.

The surge happened fast. Between September 9-14, 2025, Bitcoin Core nodes increased only 1.54%. Bitcoin Knots nodes jumped 47.6% in the same period. In January 2024, only 69 nodes ran Knots. That’s 638% growth in under two years.

However, mining power tells a different story. Major pools, including Foundry USA, AntPool, and ViaBTC, continue following Bitcoin Core rules. Hash rate supporting Knots remains under 3%.

BIP-444: The Controversial Proposal

On October 24, 2025, an anonymous developer, “Dathon Ohm,” published Bitcoin Improvement Proposal 444 on GitHub. The proposal sparked immediate fury.

BIP-444 calls for a temporary one-year soft fork that would severely restrict arbitrary data in Bitcoin transactions:

• OP_RETURN outputs capped at 83 bytes
• Most scriptPubKeys limited to 34 bytes
• Banning OP_IF inside Tapscripts (killing Ordinals inscriptions)

The proposal includes provocative language: “There is a moral and legal impediment to any attempt to reject this soft fork.” Critics called it threats and coercion.

The Legal Liability Argument

BIP-444 supporters center their arguments on legal risk. If the blockchain contains illegal material, node operators must choose between violating the law and shutting down nodes.

Luke Dashjr publicly supported BIP-444, calling it a temporary emergency measure.

The Censorship Counterargument

Opponents reject the emergency framing. Peter Todd demonstrated a workaround within hours, undermining the technical effectiveness.

Alex Thorn of Galaxy Digital called BIP-444’s legal theories “mumbo jumbo.” These fears echo old debates about permissionless systems that Bitcoin already resolved.

What Institutional Investors Think

Alex Thorn conducted a poll of 25 institutional Bitcoin investors:

• 46% weren’t aware of the Bitcoin Core vs Knots debate
• 36% knew about it but remained neutral
• 18% had opinions, all preferring Bitcoin Core
• Zero institutional investors supported Knots

Thorn concluded that “real capital, real investors, service providers see no problem at all.”

Michael Saylor’s Controversial Involvement

In September 2025, Michael Saylor reposted a video clip ending with “Run Knots.” Bitcoin Knots supporters claimed Saylor backed their position. However, Saylor likely hadn’t watched the entire clip.

His company Strategy holds over 250,000 BTC, making his technical positions influential.

Three Possible Futures

Alex Thorn outlined three scenarios:

Scenario One: Irrelevance (Most Likely)

Knots fades into obscurity. Most users stick with Core. The network continues without disruption. This seems most probable given institutional indifference and mining pool alignment.

Scenario Two: Self-Fulfilling Fear

Knots supporters create enough fear to scare some users and slow Bitcoin adoption temporarily. But their solutions still fail. Bitcoin proves resilient and recovers.

Scenario Three: Harmful Fork (Unlikely but Catastrophic)

BIP-444 or similar proposals gain adoption. The resulting “solutions” fall short while scaring the world about permissionless systems. Bitcoin adoption suffers irreparable harm.

The Mining Pool Factor

Miners control which transactions enter blocks. Their economic incentives strongly favor Bitcoin Core’s approach. All valid transactions paying fees represent revenue.

Major pools have not signaled support for transaction filtering. For Knots to succeed, it would need a majority hash power. Current trends suggest this won’t happen.

The Ordinals Connection

The Bitcoin Core vs Knots debate connects directly to the Ordinals controversy that erupted in 2023. Ordinals is a protocol for creating NFT-like inscriptions directly on Bitcoin.

Bitcoin Knots includes filtering options specifically designed to block Ordinals. BIP-444’s provision banning OP_IF inside Tapscripts directly targets the Ordinals inscription method.

Historical Parallel: 2017 Block Size Wars

The 2017 conflict resulted in Bitcoin Cash forking away. Bitcoin’s price dipped briefly but recovered strongly. Bitcoin Cash never seriously threatened Bitcoin’s dominance.

However, the current situation differs. The 2017 split involved miners and hash rate. This time, the division centers on node operators.

Expert Perspectives

Pro-Core:

Peter Todd: “It’s very unlikely miners will turn down this revenue source. Censoring these transactions just incentivizes private mempools.”

Jameson Lopp: “Knots only has a single maintainer… not what we should desire in an open source project leader.”

Pro-Knots:

Luke Dashjr: “Bitcoin’s greatest threat is that far too few people are using a full node.”

Samson Mow announced he will not run Bitcoin Core v30, calling it dangerous.

Key Differences: Bitcoin Core vs Knots

FAQs

What is Bitcoin Knots used for?

Bitcoin Knots is used by node operators who want stricter rules around transaction types. It gives more control over non-financial data like inscriptions and enforces a 42-byte OP_RETURN limit versus Core’s 100,000 bytes.

Could Bitcoin fork because of the Core vs Knots conflict?

A fork remains unlikely but not impossible. The dispute involves policy differences rather than consensus rules. However, if BIP-444 gains significant mining support (20-70% hash rate), a chain split could occur. Major pools continue following Core rules.

What is BIP-444 and why is it controversial?

BIP-444 is a proposal for a temporary one-year soft fork to restrict arbitrary data in Bitcoin transactions. It would cap OP_RETURN at 83 bytes and ban Ordinals inscriptions. Supporters cite legal liability concerns. Critics call it censorship, violating Bitcoin’s permissionless principles.

What percentage of Bitcoin nodes run Knots vs Core?

As of September 2025, approximately 20% of public Bitcoin nodes run Knots (4,600+ nodes), up from 69 nodes in January 2024 (638% growth). Bitcoin Core dominates with 80% of nodes. However, mining hash rate supporting Knots remains under 3%.

What do institutional investors think about this debate?

Most institutional investors don’t know or care. A Galaxy Digital poll found 46% unaware of the debate, 36% neutral, and 18% with opinions—all favoring Core. Zero institutional investors supported Knots.

Are node operators legally liable for blockchain content?

No clear legal precedent exists. Experts believe node operators are protected under safe harbor provisions like internet service providers, since they don’t create content. However, this remains untested in courts.

What are Ordinals, and how do they relate to the Bitcoin Core vs Knots debate?

Ordinals are NFT-like inscriptions created directly on Bitcoin, introduced in December 2022. They embed arbitrary data in transactions. Bitcoin Knots specifically filters Ordinals, and BIP-444 includes provisions to ban techniques Ordinals uses.

Should I upgrade to Bitcoin Core v30 or switch to Knots?

Most users should stick with Bitcoin Core v30 for maximum compatibility, extensive peer review, and alignment with mining pools. Choose Knots only if you have strong philosophical objections and accept risks of single-maintainer software.

How do miners view the Bitcoin Core vs Knots debate?

Major mining pools continue following Bitcoin Core rules. Miners have economic incentives to accept all valid transactions paying fees. Hash rate supporting Knots remains minimal (under 3%). Without mining support, Knots cannot force consensus changes.

What did Michael Saylor say about Bitcoin Core vs Knots?

Saylor’s position remains ambiguous. He reposted a pro-Knots video in September 2025 but likely didn’t watch it fully. Earlier, he warned, “even good ideas can destroy Bitcoin” if implemented poorly. He never explicitly endorsed either side.

What Comes Next

Several factors will determine resolution over the next 6-12 months:

• Bitcoin Core v30 adoption rates
• BIP-444’s formal consideration status
• Any legal developments regarding node liability
• Mining pool position signals
• Developer relationship evolution

The most likely outcome remains scenario one: Knots maintains a minority position, Core continues dominating, and Bitcoin persists without a major crisis.

Conclusion

The Bitcoin Core vs Knots debate is a referendum on Bitcoin’s identity.

Should Bitcoin remain strictly monetary, or accommodate broader uses? Should node operators filter transactions, or maintain strict neutrality?

Bitcoin Core v30 shipped. Mining pools follow Core rules. Institutional investors remain unconcerned. But a passionate minority strongly disagrees.

The next year will prove decisive. Bitcoin has weathered fierce internal conflicts before. The 2017 block size wars nearly tore the community apart. Each time, Bitcoin emerged stronger.

This messy process is Bitcoin’s governance working as designed. No central authority dictates outcomes. No single group controls the network.

The Bitcoin Core vs Knots battle will shape Bitcoin’s next chapter. But Bitcoin itself will endure.

Disclaimer

This article is for informational purposes only and should not be considered financial, legal, or investment advice. Always do your own research.