The Cat in the Taproot Wizards Hat

The bull market we thought we would get in 2025 never arrived, and because we’re not enjoying a year of up-only markets smashing $150 000 and beyond, the community has turned its attention away from NGU and toward each other.

We need something to entertain ourselves and someone to blame for the lack of a new moon! So, back we go to the inscriptions debate.

Insert GTA meme! Here we go again!

Since Bitcoin Core 30 rolled out, a major win for arbitrary data enjoyers, the monetary maximalist crowd have gone back to the drawing board.

In the latest development in the ongoing saga, a provocatively named proposal emerged from the shadows of Bitcoin’s development community: “The Cat” (officially titled “Non-monetary UTXO Cleanup”). This soft fork proposal represents one of the most contentious and philosophically divisive ideas ever suggested for Bitcoin—a plan to permanently delete a specific set of existing UTXOs from the blockchain, making them unspendable and eligible for removal from every node’s UTXO set.

The target?

Millions of UTXOs created by protocols like Ordinals, Stamps, and other “inscription” methods that have embedded arbitrary data—NFT-like images, text, memes, and other non-financial information—directly into Bitcoin’s sacred ledger.

The Cat aims to eliminate these “non-monetary UTXOs” in one fell swoop, removing what proponents view as blockchain bloat and what critics view as legitimate Bitcoin transactions protected by the network’s core principle: censorship resistance.

The proposal’s very existence has sparked fierce debate about Bitcoin’s purpose, its governance, and whether the network should distinguish between “good” financial transactions and “bad” data storage. Even more controversially, the proposal’s author claims it was censored by Bitcoin Development Mailing List moderators—blocked from appearing on the official discussion forum where Bitcoin improvements are typically debated, forcing the discussion to GitHub and alternative channels.

Welcome to the strangest chapter in Bitcoin’s ongoing civil war over what constitutes legitimate use of block space.

What Is “The Cat” Soft Fork?

At its core, The Cat proposal is deceptively simple: identify a snapshot-based set of UTXOs created by non-monetary protocols (primarily Ordinals and Bitcoin Stamps), make those specific UTXOs permanently unspendable through a soft fork consensus change, and eventually prune them from the UTXO set entirely.

The Mechanism

The Cat would work through several steps:

• Step 1: Take a Snapshot: At a specific block height (to be determined), take a comprehensive snapshot of the entire UTXO set and identify all UTXOs that qualify as “non-monetary” according to defined criteria.
• Step 2: Create a Permanent Blacklist: Generate a definitive list of these NMU transaction outputs (txid and vout combinations) that will be targeted for elimination.
• Step 3: Implement Soft Fork Rules: Deploy new consensus rules that make it invalid to spend any UTXO on the blacklist. Miners would reject any transaction attempting to spend these outputs, and nodes would consider blocks containing such transactions as invalid.
• Step 4: UTXO Set Cleanup: Once UTXOs are provably unspendable through consensus, nodes can safely delete them from the UTXO set, reducing the database size that every full node must maintain.

Critically, The Cat does not propose any new relay or standardness policies for future transactions. It doesn’t try to prevent new inscriptions or stamps from being created going forward. Instead, it attempts to remove the financial incentive for creating such data by demonstrating that the Bitcoin community can and will delete non-monetary UTXOs, making them a poor store of value for NFT-like assets.

What Are “Non-Monetary UTXOs”?

This is where things get controversial. The Cat relies on external indexer software—specifically the Ordinals indexer (ord) and Stamps indexer—to determine which UTXOs qualify as “non-monetary.”

According to the proposal, these indexers use specific rules to identify UTXOs containing inscription data, including:

• Ordinal Inscriptions: Data embedded in Bitcoin transactions using the Ordinals protocol, which assigns unique identifiers to individual satoshis and allows arbitrary data to be “inscribed” on them
• Bitcoin Stamps: Another protocol that embeds data into UTXOs using specific encoding schemes
• Other Data Protocols: Various methods of embedding arbitrary non-financial data into Bitcoin transactions

The controversy lies in who decides what constitutes “non-monetary” use and whether Bitcoin should make such distinctions at all.

The Motivation: Why Would Anyone Propose This?

Proponents of The Cat point to several serious concerns about the proliferation of data-storage protocols on Bitcoin:

UTXO Set Bloat

The UTXO set is the database of all unspent transaction outputs that every Bitcoin full node must maintain in fast-access memory. When the UTXO set grows, it increases hardware requirements for running full nodes, potentially reducing decentralisation.

Ordinals and Stamps have created millions of small-value UTXOs containing embedded data. Many of these UTXOs are economically “dust“—they contain Bitcoin values so small that the transaction fees required to spend them exceed the value they contain. These dust UTXOs will likely never be spent, yet they must remain in the UTXO set indefinitely, imposing a perpetual cost on every node operator.

The Cat’s supporters argue this is an inefficient use of Bitcoin’s scarce block space and permanent storage, forcing all node operators to store data they never consented to host.

If inscription UTXOs under 1k sats were removed from the UTXO set we would remove 38% of the memory being used by Bitcoin clients to store the UTXO set. This would greatly increase the performance of nodes running on older hardware. pic.twitter.com/nJd85hnqD4

— Claire Ostrom (@ostrom72158) December 7, 2025

Blockchain Size Growth

Beyond the UTXO set, the full blockchain itself has grown dramatically due to inscription activity. Every inscription adds permanent data that full archival nodes must store forever. While pruned nodes can discard old transaction data, the trend toward large data inscriptions increases bandwidth requirements and makes initial blockchain download more burdensome for new nodes.

Fee Market Distortion

During peak inscription mania in 2023-2024, transaction fees spiked dramatically as inscription users competed for block space. While some argue this demonstrates Bitcoin’s fee market working as intended, others contend that non-financial data storage distorts the fee market away from Bitcoin’s core purpose: peer-to-peer electronic cash transactions.

Regular Bitcoin users found themselves priced out during inscription frenzies, paying exorbitant fees for simple transactions while NFT minters and token minters clogged the mempool.

Philosophical Purpose

Perhaps most fundamentally, The Cat’s supporters argue that Bitcoin was designed as a monetary network—a peer-to-peer electronic cash system, not a decentralised data storage platform. By allowing and incentivising arbitrary data storage, Bitcoin is being diverted from its core mission.

The analogy often used: Bitcoin’s ledger is like a nation’s property registry. Just as it would be inappropriate to store restaurant menus or comic books in property deed records, it’s inappropriate to store JPEGs and memes in Bitcoin’s financial transaction ledger.

The Fierce Opposition: Why The Cat Is Controversial

If The Cat’s motivations sound reasonable, why is it one of the most controversial proposals in Bitcoin history? The opposition is multi-layered and philosophically deep:

Censorship Resistance Is Bitcoin’s Core Value

Bitcoin’s fundamental promise is censorship resistance—the idea that no entity can decide which transactions are “valid” based on their content or purpose. As long as a transaction follows the consensus rules (proper signatures, valid amounts, etc.), it should be accepted by the network regardless of what additional data it contains or what economic purpose it serves.

The Cat explicitly violates this principle by categorizing certain transactions as “non-monetary” and deleting their outputs based on their perceived purpose rather than any technical invalidity. This sets a dangerous precedent: if Bitcoin can delete Ordinals outputs today because they’re “not monetary,” what prevents deleting other outputs tomorrow? Could transactions to gambling sites be next? Donations to controversial political causes? Payments to entities on government sanctions lists?

Once Bitcoin accepts that transaction content and purpose matter for validity, the door opens to endless debates about what constitutes “legitimate” use—debates that undermine Bitcoin’s neutral, permissionless design.

Subjective Enforcement Requires Centralised Indexers

The Cat relies on external indexer software (ord, stamps) to determine which UTXOs are “non-monetary.” This introduces subjective judgment and centralised trust into Bitcoin’s consensus mechanism.

Who maintains these indexers? Who decides the rules for what qualifies as an inscription? If the indexer software changes its detection algorithm, does that change which UTXOs get deleted? This dependency on external, potentially changing software conflicts with Bitcoin’s deterministic consensus model, where all nodes should reach identical conclusions using only blockchain data and mathematical rules.

Critics argue this creates a dangerous precedent where Bitcoin consensus depends on off-chain social agreements about what indexer results to trust—a form of governance centralisation Bitcoin was designed to avoid.

Property Rights Violation

Perhaps the most serious moral objection: The Cat would confiscate private property. People purchased these inscription-containing UTXOs in good faith, paying market prices for what they believed were Bitcoin-based NFTs. Many spent thousands or millions of dollars acquiring Ordinals NFTs, believing they owned digital property secured by Bitcoin’s immutable ledger.

The Cat would retroactively invalidate these purchases, making their property permanently unspendable and worthless. This retroactive rule change violates expectations of immutability that underpin Bitcoin’s value proposition. If Bitcoin can delete your UTXOs today because the community doesn’t like how you’re using them, how can anyone trust that their Bitcoin won’t be deleted tomorrow?

This sets a precedent that Bitcoin ownership is conditional—subject to future community approval of your transaction’s purpose. Such conditionality undermines Bitcoin’s function as sound, censorship-resistant money.

"I have this novel idea on how to increase node performance…let's just confiscate a bunch of people's bitcoin." https://t.co/tm9rRcZcxi

— Shinobi (@brian_trollz) December 7, 2025

Technical Concerns: Determinism and Reproducibility

The Cat proposal acknowledges but downplays a serious technical problem: how do nodes determine which UTXOs to make unspendable in a fully deterministic, reproducible way?

The draft suggests nodes would need to run Ordinals indexer software (ord) and Stamps indexers to generate the list of NMU outputs. But these indexers are complex software projects with their own bugs, versioning issues, and interpretation disagreements. What happens if different nodes run different indexer versions and get different results about which UTXOs should be deleted?

Bitcoin’s consensus mechanism requires perfect agreement among all nodes about blockchain validity. Introducing dependency on external indexer software creates fragility and potential consensus failures that could split the network.

Here’s an improved proposal for dust expiry without confiscation:

Old, tiny UTXOs become prunable, but users can still spend them by providing an SPV proof.
Shifts storage burden to the user. Reduces UTXO spam by 8x+. https://t.co/mOO7yL3exa pic.twitter.com/wzucFAZys7

— яobin linus (@robin_linus) May 20, 2025

Slippery Slope of Content-Based Rules

Critics warn that The Cat establishes a slippery slope: once Bitcoin accepts that some transaction content is “spam” deserving deletion, endless arguments will emerge about other “undesirable” uses.

• Should Mixer transactions be deleted as facilitating money laundering?
• Should small-value “dust” transactions be deleted as economically wasteful?
• Should transactions to sanctioned addresses be made unspendable for legal compliance?
• Should transactions with specific political messaging embedded be removed?

Each of these could be argued as beneficial to Bitcoin’s efficiency, security, or legal standing—using identical logic to The Cat’s arguments about Ordinals. Once content-based deletion is accepted as legitimate, there’s no principled line to prevent expansion of censorship.

It Won’t Actually Work

Many critics argue The Cat is futile because it doesn’t prevent future inscriptions—it only deletes existing ones. The proposal explicitly states it doesn’t introduce new relay policies to block future inscription transactions.

If that’s the case, inscription users will simply recreate their NFTs after The Cat activates, quickly returning the UTXO set to its bloated state. Meanwhile, Bitcoin will have violated its censorship-resistance principles and created dangerous precedents for property confiscation—all without achieving its stated goal of reducing UTXO bloat.

Some go further, arguing that attempting to delete Ordinals will only increase their scarcity and perceived value, making “Cat-survived” Ordinals more valuable and incentivising even more inscription activity going forward.

The Censorship Allegation: Mailing List Moderation

Perhaps the most explosive aspect of The Cat controversy isn’t the technical proposal itself—it’s the allegation of censorship in Bitcoin’s governance process.

According to the proposal’s author (ostromcode), multiple attempts were made in December 2025 to post The Cat to the Bitcoin Development Mailing List—the traditional venue for discussing Bitcoin Improvement Proposals before requesting formal BIP numbers.

These messages were blocked by moderation and never appeared on the list, preventing public discussion of the proposal despite it being a fully worked draft with detailed specification and rationale.

The author’s GitHub repository includes a pointed note:

“In the author’s view, this sets a troubling precedent. Moderation should primarily filter spam and clearly low-effort or off-topic content, not decide which substantive technical proposals the wider community is allowed to see. When controversial ideas are stopped at the moderation layer, it effectively puts a thumb on the scale of Bitcoin’s governance by suppressing discussion rather than allowing the community to evaluate and critique the ideas on their technical merits.”

"The Cat": soft-fork that makes Ordinals/Stamps UTXOs unspendable forever + prunable. Clean, incentive-aligned, no new tx rules.

Got blocked multiple times on the Bitcoin mailing list due to "moderation".

Full BIP draft here: https://t.co/RsxU0DqvJH#Bitcoin #TheCat #BIP110

— Mirror (@ianmirror02) December 7, 2025

This allegation raises profound questions about Bitcoin’s governance:

Who Controls Bitcoin Discussion?

If mailing list moderators can prevent proposals from being discussed, do they wield de facto veto power over Bitcoin’s evolution? Should moderation focus purely on spam/harassment, or can moderators legitimately block proposals they view as harmful or contrary to Bitcoin’s principles?

Is This Censorship Justified?

Defenders of the moderation decision might argue The Cat is so fundamentally incompatible with Bitcoin’s values (censorship resistance, immutability, property rights) that preventing its discussion protects the community from a dangerous idea.

Critics counter that all ideas—no matter how controversial—should be allowed into the public discourse, where they can be evaluated and criticised on their merits. Suppressing discussion of bad ideas doesn’t make them go away; it just forces discussions into fragmented channels where misunderstandings proliferate.

Precedent for Future Proposals

If The Cat can be blocked from the mailing list,

What other proposals might face similar treatment?

Could proposals for privacy improvements be blocked as “enabling criminal activity”?

Could scalability proposals be blocked as “insufficiently conservative”?

Where is the line?

The Taproot Wizards Connection

The proposal’s title—”The Cat in the Taproot Wizards’ Hat”—references the Taproot Wizards, a prominent organisation in the Ordinals ecosystem that has been at the forefront of inscription culture on Bitcoin.

The Taproot Wizards have been instrumental in popularising Ordinals, including:

• Running high-profile NFT collections
• Advocating for OP_CAT (a different, unrelated soft fork proposal to restore a disabled opcode)
• Promoting Bitcoin as a platform for digital artefacts and culture beyond pure financial transactions
• Challenging Bitcoin maximalist narratives about what constitutes “legitimate” Bitcoin use

The Cat proposal represents the philosophical opposite of the Taproot Wizards’ vision. Where they see Bitcoin as a canvas for creativity and cultural expression, The Cat sees unwanted graffiti that must be scrubbed away. The title itself seems to mock the Taproot Wizards’ influence, suggesting their “hat” (Taproot upgrade) has let in a “cat” (The Cat proposal) that will undo the inscription ecosystem they’ve built.

This clash represents a deeper ideological divide in Bitcoin:

The “Sound Money” Camp: Bitcoin should remain focused purely on monetary transactions, with all features and resources dedicated to being the world’s best money. Anything that distracts from or undermines this mission should be discouraged or removed.

The “Programmable Bitcoin” Camp: Bitcoin’s scripting system enables many use cases beyond simple payments, and the network should remain open to experimentation and creativity, even if some uses seem non-financial. Censoring uses based on purpose violates Bitcoin’s permissionless ethos.

Technical Analysis: Could The Cat Actually Work?

Setting aside philosophical objections, could The Cat technically function as proposed?

The Snapshot Problem

Creating a definitive list of “non-monetary UTXOs” at a specific block height seems straightforward, but devils lurk in details:

• Indexer Agreement: All nodes must run identical indexer software and reach identical conclusions about which UTXOs qualify. Any divergence creates consensus failures and potential chain splits.
• Edge Cases: What about UTXOs that contain both financial value and inscription data? What about inscriptions split across multiple UTXOs? What about new inscription protocols that don’t match current indexer rules?
• Version Control: If indexer software is updated after the snapshot, do nodes use the old version (preserving determinism) or new version (improving accuracy)? How is this coordinated?

The Enforcement Challenge

Once NMU outputs are identified and blacklisted, enforcement seems simple: reject any transaction attempting to spend them. But complications arise:

• Reorg Risk: If a blockchain reorganisation occurs near the snapshot block, the UTXO set could change, potentially making the pre-generated blacklist incorrect. How is this handled?
• Partial Spends: What if a transaction spends both blacklisted and legitimate UTXOs? Is the entire transaction invalid, or just the blacklisted inputs?
• Child Transactions: Some blacklisted UTXOs might be parents of unconfirmed child transactions still in the mempool. Making parents unspendable invalidates children—a cascading effect that could disrupt many transactions.

The Coordination Puzzle

Soft forks require overwhelming consensus to activate safely, and The Cat even if it were an official BIP, would face unique coordination challenges:

• Indexer Distribution: Not all nodes currently run ord or stamps indexers. Requiring them to do so for consensus validation imposes new requirements and dependencies.
• Social Consensus: The Cat’s controversial nature means achieving broad community support (typically 90%+ of hashrate) will be extremely difficult. Activation without overwhelming consensus risks chain splits.
• Legal Exposure: Node operators and miners implementing The Cat might face legal liability for property confiscation, depending on jurisdiction. This could deter adoption even among philosophical supporters.

Alternative Approaches: Addressing UTXO Bloat Without Censorship

Critics of The Cat often acknowledge that UTXO set bloat and blockchain growth from inscriptions are real concerns, but they argue for alternative solutions that don’t require censoring transaction content:

Economic Disincentives

• Higher Witness Discounts Removal: Inscriptions exploit Bitcoin’s witness data discount (SegWit makes witness data “cheaper” than other transaction data). Reducing or eliminating this discount would make inscriptions more expensive relative to financial transactions.
• Dust Limits: Implementing or raising dust limits could prevent creation of economically unspendable UTXOs, regardless of their purpose.
• Fee Market Evolution: Simply letting the fee market work—if inscription demand is real, users will pay for block space; if it’s not, it will naturally decline without intervention.

Technical Solutions

• UTXO Set Commitments: Implementing UTXO set commitments would allow nodes to verify blockchain validity without maintaining the full UTXO set, reducing hardware requirements without deleting any outputs.
• Better Pruning: Improvements to blockchain pruning could allow nodes to discard old inscription data while still validating transactions, reducing storage burden.
• Layer 2 Migration: Encouraging inscription protocols to move to Layer 2 solutions (sidechains, Lightning, other networks) where they don’t impact Bitcoin’s base layer.

Social Pressure

• Community Standards: Rather than enforcing through consensus, the community could socially discourage inscription use through education, wallet defaults that don’t relay inscription transactions, and ecosystem coordination.
• Competing Protocols: Supporting inscription-focused altcoins or sidechains could provide better platforms for NFT use cases, naturally migrating activity away from Bitcoin mainchain.

The Broader Context: Bitcoin’s Governance Crisis

The Cat represents more than just a technical proposal—it’s a symptom of Bitcoin’s ongoing governance crisis. The network faces fundamental questions about how it should evolve:

Who Decides Bitcoin’s Purpose?

Is Bitcoin primarily money, requiring all features to serve financial use cases? Or is Bitcoin a neutral, general-purpose platform where any use that follows consensus rules is legitimate?

The Cat forces Bitcoin to choose: Either embrace content-neutrality and accept inscriptions as valid Bitcoin use, or assert that some uses are illegitimate and subject to removal. There’s no middle ground.

How Should Bitcoin Make Decisions?

If controversial proposals can be blocked from official discussion forums, how does Bitcoin’s decentralised governance actually function? If they can’t be blocked, how does the community avoid being overwhelmed by proposals that violate core principles?

What Is Bitcoin’s Social Contract?

Users believe Bitcoin offers certain guarantees: censorship resistance, immutability, and property rights. The Cat would violate these guarantees to address technical concerns.

What happens when different values conflict?

Which takes priority?

A Fork in Bitcoin’s Philosophical Road

The Cat proposal might be a scare tactic in this game of social consensus, drawing us closer to a nuclear approach. Regardless of its technical merits or flaws, it’s adding fuel to the fire on picking a side.

On one side stand those who see Bitcoin as money—a narrowly focused, optimised system for financial transactions that must resist all features and uses that don’t directly serve monetary purposes. For them, The Cat represents necessary housekeeping, deleting spam that never belonged on Bitcoin in the first place.

On the other side stand those who see Bitcoin as a neutral, censorship-resistant protocol that must remain open to all uses, no matter how unusual or unpopular. For them, The Cat represents an existential threat to Bitcoin’s core values—a precedent that, once set, will enable endless expansion of censorship and control.

Both sides claim to defend “Bitcoin’s principles.”

Both cite Satoshi Nakamoto’s writings. Both believe their position is essential for Bitcoin’s long-term success. They cannot both be right.

The Cat may never activate—it faces overwhelming technical, social, and philosophical opposition. But its very existence reveals the deep ideological fissures within Bitcoin’s community. These debates about purpose, governance, and principles will continue long after The Cat proposal fades from discussion.

Bitcoin was designed to be many things: decentralised, immutable, censorship-resistant, permissionless, neutral. The Cat reveals that in extreme cases, these properties can come into tension. Maintaining decentralisation might require deleting bloat. Preserving immutability might mean accepting undesired uses. Enforcing neutrality might mean tolerating what some view as abuse.

As Dr. Seuss might have written if he’d lived to see Bitcoin’s civil wars:

The Cat in the Wizards Hat came with a plan,
To delete all the transaction data some call spam,
“These Ordinals and Stamps are not money!” he said,
“They’re bloat and they’re spam and they should all be dead!”

But Bitcoin Core developers said with a frown,
“We can’t just delete UTXOs around,
For censorship resistance is what Bitcoin’s about,
And content-based rules would surely cause doubt.”

The Cat in the Hat just grinned at their worry,
“Sometimes,” said the Cat, “you must act in a hurry,
For if all the nodes are weighed down by this data,
Then decentralization will come to a stutter!”

So who will decide what belongs on the chain?
Should Bitcoin be money or canvas for art to remain?
The Cat in the Hat showed us one thing for sure:
These questions of purpose have no easy cure.

Okay, that was cringe, I’m never trying that one again!

The Cat sits at the intersection of Bitcoin’s most contentious debates: scalability versus functionality, purity versus pragmatism, principles versus practice. Its ultimate fate—whether debated, implemented, rejected, or forgotten—will reveal much about what Bitcoin is becoming and who really decides its future.

For now, The Cat remains in its hat: a proposal too controversial for official forums, too provocative to ignore, too divisive to resolve. Whether it represents Bitcoin’s future or its road not taken, only time and the community’s collective choices will tell.

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Note: This article discusses a draft Bitcoin Improvement Proposal that has not been officially assigned a BIP number and remains highly controversial within the Bitcoin community. If you would like to do your own research consider checking out the following resources.

• https://github.com/ostromcode/The-Cat
• https://github.com/ostromcode/The-Cat/blob/main/bip-the-cat.md