Bitcoin’s BIP-110 Rebellion Is Running Out of Road, but the Fight Over Bitcoin’s Purpose Is Far From Over

Bitcoin’s most important disputes rarely begin with price. They begin with a deceptively simple question about what the network is allowed to become.

BIP-110, a proposal to temporarily restrict the amount and type of non-financial data stored in Bitcoin transactions, has turned that question into the protocol’s most contentious governance fight in years. Supporters argue that images, tokens and other arbitrary data impose permanent costs on node operators while distracting Bitcoin from its monetary mission. Opponents warn that policing transaction content at the consensus level would damage neutrality, restrict future upgrades and risk splitting the network.

As the proposal approaches its activation window, the practical verdict appears increasingly clear. Miner signaling has remained below roughly 1%, major pools have declined to support it and prominent Bitcoin figures including Michael Saylor, Adam Back, Jameson Lopp and David Bailey have publicly opposed the plan.

BIP-110 may be losing the activation battle. The ideological conflict behind it is not going away.

From an OP_RETURN Dispute to a Consensus Fight

The origins of BIP-110 can be traced to a wider argument over Bitcoin Core version 30 and its handling of OP_RETURN, a transaction output commonly used to attach small amounts of data to the blockchain.

Bitcoin Core had historically applied a default relay-policy limit of approximately 80 bytes to OP_RETURN data. Version 30 relaxed that policy substantially, effectively allowing larger data-carrying transactions to move through nodes running the standard configuration.

That change did not alter Bitcoin’s consensus rules. It did not make previously invalid transactions valid. It changed which already-valid transactions Bitcoin Core nodes would normally relay through their mempools.

The distinction between policy and consensus is central to the current controversy.

Policy determines which transactions an individual node chooses to relay or which transactions a miner chooses to include. Different nodes can maintain different policies while still agreeing on the same blockchain.

Consensus determines whether a block is valid. When consensus rules change, nodes enforcing different rules can permanently disagree over which chain represents Bitcoin.

BIP-110 attempts to move the arbitrary-data dispute from the policy layer into consensus. Transactions that are valid under current Bitcoin rules could become invalid to nodes running the proposal.

That escalation is precisely what supporters consider necessary—and what opponents consider dangerous.

What BIP-110 Would Actually Change

Known as the Reduced Data Temporary Softfork, BIP-110 proposes a one-year restriction on several methods used to embed data inside Bitcoin transactions.

The proposal would restore an 83-byte consensus limit for OP_RETURN outputs, restrict many data pushes and witness items larger than 256 bytes, and impose additional limits on certain Taproot structures. It would also temporarily disable several currently unused or rarely used scripting mechanisms that supporters believe can be exploited for data storage.

The proposal is therefore broader than a simple attempt to stop oversized OP_RETURN messages. It affects multiple transaction structures, including some that could become useful for future Bitcoin upgrades or advanced contracting systems.

Coins created before activation would be grandfathered, reducing the risk that existing funds could suddenly become unspendable. The restrictions would automatically expire after approximately one year unless a new proposal extended or replaced them.

Supporters present this temporary design as a controlled intervention rather than a permanent redesign. The network would gain time to reduce abusive data usage, observe the effects and consider a more refined long-term solution.

Critics argue that a temporary consensus rule is still a consensus rule. Even if it expires, it can create incompatible chains, disrupt applications and establish a precedent for invalidating transactions based on how participants interpret their purpose.

The Case for Keeping Bitcoin Focused on Money

The strongest argument for BIP-110 is economic rather than cultural.

When a miner includes a data-heavy transaction, the miner receives a fee once. Every full node may then be required to download, validate and store information associated with that transaction for years.

BIP-110 supporters describe this as an externality. The person embedding the data pays the miner, but does not fully compensate the thousands of node operators carrying the long-term infrastructure burden.

They also reject the idea that the fee market automatically solves the problem. A market for permanent, globally replicated data storage is not necessarily compatible with a market designed to prioritize financial transactions. Wealthy inscription users can compete with ordinary payments for limited block space, potentially raising fees for people trying to use Bitcoin as money.

The proposal’s authors argue that Bitcoin should not become a general-purpose database. Images, documents and token metadata can be stored through specialized systems such as IPFS, BitTorrent, Nostr or conventional cloud infrastructure. Bitcoin’s scarce base-layer capacity, in their view, should remain focused on transferring and securing value.

Luke Dashjr, a longtime Bitcoin developer and a leading supporter of restrictive transaction policies, has defended this monetary-first interpretation. Ocean, the mining pool associated with Dashjr, produced some of the earliest blocks signaling support for BIP-110.

For its supporters, the proposal is not censorship. It is resource management.

Why Michael Saylor Opposes BIP-110

Michael Saylor’s intervention significantly raised the profile of the dispute.

The Strategy executive chairman acknowledged that many Bitcoiners he respects support the proposal and that concerns about arbitrary data are legitimate. His objection is directed at the proposed cure.

Saylor argues that BIP-110 transforms a disagreement about relay policy, mining policy and market incentives into a dispute over transaction validity. In his view, consensus should not be used to settle a cultural argument about which fee-paying transactions are desirable.

He escalated his opposition by publishing an extensive list of 110 objections to the proposal. His concerns include the complexity of introducing seven new restrictions, the potential effect on future scripting upgrades, the possibility of incompatible implementations and the danger of attempting activation without overwhelming agreement.

Saylor also objected to the proposal’s 55% miner-signaling threshold. Conventional Bitcoin soft-fork deployments have often targeted much higher levels of readiness because even a technically backward-compatible change can become dangerous when important participants do not enforce the same rules.

His broader position is that Bitcoin’s resistance to change is a security feature. He described hard consensus as the network’s “immune system,” arguing that controversial ideas should fail before an attempted improvement causes greater damage than the original problem.

Saylor’s influence does not give him formal authority over Bitcoin. There is no board of directors that can approve or reject a protocol change. Nevertheless, his public opposition matters because Strategy is one of the largest institutional Bitcoin holders and Saylor has become a central voice in corporate Bitcoin adoption.

His message to institutions is straightforward: Bitcoin’s credibility depends on predictable rules, not frequent intervention.

Adam Back, Jameson Lopp and David Bailey Join the Opposition

Saylor is not alone.

Blockstream co-founder Adam Back has said the network has effectively and “robustly rejected” BIP-110. He argues that participants who want stricter rules are free to operate their own fork, but should not expect the wider Bitcoin economy to recognize it as the primary network.

Back’s position reflects an important distinction in Bitcoin governance. Anyone can release software with new rules. The difficult part is persuading miners, exchanges, wallets, merchants and holders to accept the resulting chain as Bitcoin.

Security engineer Jameson Lopp has also criticized BIP-110 as technically risky and philosophically inconsistent with censorship resistance. Lopp argues that Bitcoin’s value comes partly from users being able to predict that valid transactions will remain valid without receiving social approval from influential groups.

Restrictions designed to target inscriptions could also affect sophisticated scripts that were never intended for data storage. Unknown applications are particularly difficult to protect because developers cannot test compatibility with software and transaction structures they do not know exist.

David Bailey, the chairman and chief executive of Bitcoin treasury company Nakamoto, went further by describing the campaign as a “hostile takeover attempt.” He portrayed its lack of miner support as evidence that Bitcoin’s decentralized governance successfully resisted pressure from a motivated minority.

The language has become inflammatory on both sides. Yet beneath the rhetoric is a legitimate disagreement over whether Bitcoin should defend neutrality by refusing to classify transaction content—or defend decentralization by preventing users from forcing unwanted data onto node operators.

Miner Support Has Barely Materialized

Despite months of campaigning, BIP-110 has failed to attract meaningful mining support.

Ocean has signaled for the proposal, but the largest mining pools have not followed. Across monitored signaling periods, support has remained below approximately 1%, far from the proposal’s 55% threshold.

Node adoption has also remained limited and is concentrated largely among users of Bitcoin Knots, an alternative node implementation that offers more restrictive filtering controls than Bitcoin Core.

These figures do not constitute a perfectly democratic vote. One visible node does not necessarily represent one person, one company or one unit of economic influence. Nodes can be hidden, duplicated or temporarily connected. Miner signaling is also usually controlled by pool operators rather than every individual machine contributing computing power.

Nevertheless, support this low sends a clear coordination signal. The major infrastructure participants are not preparing to enforce BIP-110.

Calling the proposal officially defeated would still be premature. Its activation mechanism contains a mandatory-signaling phase intended to force a decision before the deadline. Nodes running the BIP-110 software would begin rejecting blocks that fail to signal during that period.

With broad support, such a mechanism could pressure miners to coordinate around the new rules.

Without broad support, the same mechanism could isolate BIP-110 nodes on a minority chain.

What Bitcoin Miners Actually Do

The debate has also exposed confusion about the role of miners in Bitcoin governance.

Miners collect transactions, arrange them into candidate blocks and perform the proof-of-work calculations required to add those blocks to the blockchain. They usually prioritize transactions offering the most attractive fees, although pools can apply additional filtering policies.

Mining pools can also place signals inside block-version fields to indicate readiness for proposed rule changes. BIP-110 uses one of these version bits.

However, miners do not possess unilateral power to rewrite Bitcoin’s rules.

Full nodes independently validate every block. A miner that creates a block violating the rules enforced by the wider network will see that block rejected, regardless of how much electricity was used to produce it.

At the same time, full nodes cannot force miners to create blocks under new rules merely by installing different software. When only a small minority enforces stricter conditions, those nodes may reject the dominant chain while the rest of the economy continues without them.

This creates a balance among miners, developers, node operators and economic users.

Developers propose and publish code. Nodes choose which code to run. Miners decide which valid transactions to include and which chain to extend. Exchanges, businesses and holders determine which chain has economic value.

No group controls the system independently. Successful changes usually require coordination across several of them.

Miner signaling is therefore not a binding election. It is a public indication of readiness and an important measure of whether a rule change can activate without operational chaos.

The 55% Threshold Is the Most Dangerous Number in the Debate

BIP-110 requires 1,109 signaling blocks within a 2,016-block adjustment period, equivalent to approximately 55%.

Supporters justify the lower-than-usual threshold by noting that the proposal is temporary and addresses what they regard as an urgent threat. Waiting for near-universal agreement, they argue, would allow arbitrary-data ecosystems to become more deeply embedded and politically difficult to remove.

Opponents see the threshold as evidence that the proposal lacks the caution required for consensus changes.

A rule supported by 55% of recent blocks could still leave a large minority of miners producing blocks rejected by upgraded nodes. Exchanges could suspend deposits, wallets might follow different chains and users could face uncertainty over which transactions were final.

Bitcoin has survived previous protocol conflicts, including the block-size war and the activation of Segregated Witness. The lesson many participants drew from those episodes was not that contentious forks are harmless, but that changes require strong coordination among users, miners and businesses.

BIP-110 has not demonstrated anything close to that alignment.

What Happens Next

The proposal’s mandatory-signaling period is scheduled around blocks 961,632 through 963,647. It is designed to produce lock-in by block 963,648, with enforcement of the new transaction rules expected around block 965,664.

Under the BIP-110 schedule, the restrictions would then remain active for 52,416 blocks, approximately one year.

The code can reach those heights regardless of political support. The crucial question is which chain the economy will follow.

With miner signaling still negligible, the most likely outcome is that the dominant Bitcoin chain continues under existing consensus rules. Nodes enforcing BIP-110 could then separate from it if they reject non-signaling blocks or blocks containing transactions prohibited by the proposal.

That would not automatically create a valuable competitor. A minority chain needs mining power, liquidity, exchange support, wallet infrastructure and users willing to assign value to it.

Without those elements, it becomes an ideological fork with little economic activity.

A dramatic shift in support remains technically possible, but the window for such a reversal is narrowing. Major mining pools would need to change position rapidly, and economic participants would need to demonstrate that the signaling represented more than temporary coordination.

Bitcoin’s Governance Is the Real Story

BIP-110 is often described as a battle over spam, Ordinals or images stored on the blockchain. Those are only the visible triggers.

The real dispute concerns who gets to define legitimate Bitcoin use.

Supporters believe Bitcoin must actively defend its monetary purpose or risk becoming an expensive permanent storage system for applications that could operate elsewhere. Opponents believe Bitcoin protects its monetary value by refusing to let developers or social majorities classify valid transactions according to subjective intent.

Both sides claim to be defending decentralization. They disagree on what decentralization requires.

For BIP-110, the immediate numbers are unforgiving. Miner support remains negligible, node adoption is limited and several influential figures have publicly rejected the proposal. Unless that changes rapidly, the attempt to restrict arbitrary data through consensus is likely to end in failure or a small minority fork.

But the pressure that produced BIP-110 remains. Bitcoin will continue attracting inscriptions, tokens, experimental protocols and uses its earliest supporters never anticipated.

The network may reject this particular solution. It has not resolved the underlying question.

Bitcoin still has to decide whether neutrality means accepting every valid fee-paying transaction—or whether preserving neutral money sometimes requires saying no to everything else.