“The Cat” and Bitcoin’s Social Contract: Can a Network Prune History Without Losing Trust?

A new technical proposal nicknamed “The Cat” has triggered one of the most emotional debates Bitcoin has seen in years. On the surface it looks like a data-management change: the idea is to freeze and remove from the system millions of tiny UTXOs that are mainly used to store Ordinals and NFT-related data. Beneath that technical description, however, lies a deeper question: is the community willing to accept deleting part of the on-chain past in exchange for long-term efficiency?

Supporters describe the proposal as necessary maintenance to protect the network’s sustainability. Many Bitcoin Core developers and long-time contributors strongly disagree, arguing that it would amount to confiscating assets and would set a dangerous precedent for Bitcoin’s core promise of immutability. In that sense, “The Cat” has become a stress test for the values the community wants to defend in the next decade.

1. Background: UTXOs, Ordinals and a Growing State

To understand why this proposal emerged, we need to revisit the basic structure of Bitcoin.

• Bitcoin is built on the UTXO model (Unspent Transaction Output). Every UTXO is an individual “coin fragment” that can be combined or split in future transactions.

• Ordinals and Bitcoin-native NFTs take advantage of the ability to embed arbitrary data in UTXO scripts. Instead of representing only a balance of satoshis, a UTXO can also hold image data, text or other metadata, creating collections of digital artefacts directly on the base layer.

• When the Ordinals boom arrived, creators minted millions of very small UTXOs whose main purpose was to store data rather than value. As a result, the UTXO set expanded rapidly, increasing storage and verification costs for full nodes.

For people who believe Bitcoin should focus narrowly on monetary usage, NFT data occupying blockspace looks like a drift away from the original mission. For them, the issue is not just disk space; it is about long-term direction: is Bitcoin meant to be a general-purpose data archive, or a lean monetary ledger?

2. What Exactly Does “The Cat” Propose?

At a high level, “The Cat” attempts to freeze and invalidate a specific subset of UTXOs – mainly those tiny outputs used to store Ordinals and similar non-monetary data. Mechanically, the idea is to define a category of UTXOs that are no longer considered spendable at the consensus level. Once that rule is enforced, new nodes would no longer need to store or verify the full data associated with them.

Proponents put forward several motivations:

• Reducing node costs: if the UTXO set continues to grow at the recent pace, running a full node becomes more expensive over time, which can push the network toward centralization.
• Preserving long-term efficiency: pruning low-value outputs is framed as cleaning up the state so that Bitcoin remains manageable for decades, not just for the next market cycle.
• Nudging NFTs off the base layer: by making it less attractive to store large amounts of non-monetary data on L1, the network could encourage NFTs and similar use cases to migrate to sidechains or higher layers.

From a purely engineering perspective, “The Cat” resembles a garbage collector in an operating system: sweep away data that appears to have little economic function so the system runs more smoothly. But crypto networks are not only software systems; they are also systems of shared expectations and social guarantees.

3. The Critics: When “Clean-Up” Becomes a Property Question

Many Bitcoin Core developers and long-time community members oppose the proposal precisely because it touches the heart of Bitcoin’s social contract. In their view, “The Cat” undermines the promise that assets recorded on the chain cannot be removed by a policy choice.

Key objections include:

• Precedent for taking away assets: however small these UTXOs may be, they belong to someone. If the network deliberately marks them as invalid, that owner loses control over something they believed was secured by consensus.

• Erosion of immutability: Bitcoin’s narrative strength comes from the idea that its ledger is permanent. Once the community accepts deleting data at the consensus level, the line between “unchangeable history” and “adjustable by majority vote” becomes blurred.

• Risk of misclassification: not all Ordinals or small UTXOs are trivial or worthless. Some may have real cultural or market value. If an identification algorithm is imperfect and deletes the wrong outputs, the damage is practically irreversible.

• Questionable long-term effectiveness: even if the current wave of NFT-related UTXOs could be pruned, determined users might find new patterns to store data on-chain. In that case, the network would have paid a large reputational cost for limited practical benefit.

In short, critics argue that the loss of trust could be larger than the efficiency gain. If users believe their data can be invalidated because a technical majority dislikes the way they use blockspace, the foundations of Bitcoin’s neutrality are weakened.

4. The Supporters: Difficult Choices for Long-Term Sustainability

Supporters of “The Cat” reply that doing nothing is also a decision, and one that may carry its own risks. A constantly expanding UTXO set raises the resource bar for running full nodes. If only a small number of actors can afford to maintain the full history, decentralization itself is under pressure.

The arguments from this camp often sound like the following:

• Bitcoin is not obligated to host every type of data: the protocol was designed around sound money. Using it as a storage layer for large media files or arbitrary content may be technically possible, but that does not mean it is aligned with the network’s goals.

• UTXOs targeted by “The Cat” can be defined in a narrow, objective way: if the criteria are clear and conservative, the risk of touching normal payment outputs can be minimized.

• Immutability must be balanced with survivability: preserving every byte forever might be elegant in theory, but if it makes node operation impractical, the long-term security of the network could suffer.

From this perspective, “The Cat” is not arbitrary interference but preventive maintenance on a critical piece of financial infrastructure. Blockspace is a scarce public resource. If low-value data crowds out monetary transactions and makes validation harder, the network may need stronger guardrails.

5. Are There Less Extreme Alternatives?

The controversy around “The Cat” also raises a constructive question: can Bitcoin manage state growth without retroactively erasing history?

Several alternative directions are being discussed:

• Policy at the mempool and relay level: instead of touching consensus rules, nodes could adopt stricter policies for relaying and mining data-heavy transactions, letting the fee market and relay rules price certain uses of blockspace higher.

• Encouraging higher-layer solutions: NFT and data-heavy use cases can move to sidechains or layer-two systems tailored for that purpose, while the base layer focuses on high-value payments and settlement.

• Improved UTXO storage techniques: research on compact proofs and alternative data structures (such as Utreexo-style models) aims to reduce storage requirements without discarding any history.

None of these options is trivial, and each carries trade-offs. But they illustrate that the space between “do nothing” and “delete data” is wide, and that technical innovation can complement governance choices.

6. What This Debate Means for Investors and Builders

For investors and builders, “The Cat” is less a short-term trading signal and more a valuable case study in how Bitcoin handles internal conflict. Consensus-level changes, especially controversial ones, usually take years of discussion and testing before any serious deployment is considered.

Even so, there are some clear lessons:

• Bitcoin is both code and social agreement. A technically elegant solution can fail if it is seen as violating core principles like property rights and neutrality.
• New use cases always compete for scarce resources. Ordinals and NFTs have brought additional fee revenue for miners, but they also intensified the debate about how the base layer should be used.
• Policy risk exists even in decentralized systems. Builders whose products rely heavily on non-standard uses of blockspace should understand how the community views those patterns.

7. Conclusion: A Stress Test for the “Non-Seizability” Promise

Whether “The Cat” is ultimately adopted or not, it has already served an important role by forcing the community to clarify what is non-negotiable in Bitcoin’s social contract. A decision to freeze and delete NFT-related UTXOs might improve metrics such as node storage or UTXO set size, but it would also raise the question: is Bitcoin still the system where assets cannot be invalidated by policy, or is it willing to trade some level of immutability for operational simplicity?

For now, the debate itself is the signal. It reminds participants that decentralization does not remove the need for difficult choices; it simply spreads those choices across a global community. How that community resolves the tension between efficiency and permanence will influence how the world perceives Bitcoin’s reliability for many years to come.

Disclaimer: This article is for educational and analytical purposes only. It does not constitute investment advice or legal guidance. Digital assets are volatile and may not be suitable for every investor. Always conduct your own research and consider consulting an independent professional before making financial decisions.