- Saylor argues Bitcoin rules should remain neutral and avoid policing lawful, fee-paying transaction activity.
- BIP 110 proposes temporary limits on data-heavy transactions, including OP_RETURN and Taproot-related uses.
- Miner backing remains near 0.86%, dramatically below the 55% signaling threshold required for lock-in.
- The debate now centers on whether decentralization needs stricter limits or broader transaction neutrality.
Strategy Executive Chairman Michael Saylor has sharpened his opposition to BIP 110, framing the proposal as a direct test of Bitcoin’s transaction neutrality.
In a July 18 essay titled “110 Reasons BIP 110 Is a Bad Idea,” Saylor argued that protocol rules should not police lawful blockspace use. Instead, he said transaction fees, miner choice, and local node policies should determine which activities compete for limited capacity.
BIP 110 Restrictions Intensify Bitcoin Governance Debate
BIP 110, known as the Reduced Data Temporary Softfork, proposes a one-year change to consensus rules. The document, published under the name Dathon Ohm, is listed as “Complete” in the improvement proposal repository.
However, that label only shows that the technical specification is finished. It does not indicate broad agreement, activation, or adoption by the network.
The plan introduces seven temporary restrictions aimed at limiting data-heavy transactions. New output scripts would generally be capped at 34 bytes, while OP_RETURN outputs would face an 83-byte ceiling.
It would also limit data pushes above 256 bytes, Taproot annexes, large control blocks, undefined witness versions, and selected Tapscript operations. Coins created before activation would remain grandfathered and could be spent under existing rules.
Supporters argue that these limits would reduce arbitrary data placed on-chain through Ordinals inscriptions, BRC-20 tokens, and similar applications. They say large payloads increase storage, bandwidth, and validation burdens for full-node operators.
They also contend that non-payment activity competes with ordinary transfers for scarce blockspace. As demand rises, fees can increase and independently validating the network may become more expensive.
Saylor accepts concerns about node accessibility, but he rejects consensus enforcement as the solution. His essay says rule changes should address clear failures threatening monetary operation, not disputes over transaction purpose.
Under that approach, miners would remain free to select fee-paying transactions. Individual nodes could also apply relay filters without redefining which transactions the entire network considers valid.
Weak Miner Support Complicates BIP 110 Activation
The proposal’s activation method has become another source of controversy. Miner lock-in requires 55% signaling during a 2,016-block difficulty period.
It also contains a user-activated path scheduled to approach in August 2026. Bitcoin Core does not enforce the proposal under its current software.
According to Bitcoin Optech, miners using Core would need outside block-template software, or they would need to mine empty blocks, to guarantee compliance after activation.
Current signaling remains near 0.86%, far below the required threshold. Major mining pools have not publicly joined the effort, making miner-led activation unlikely under present conditions.
Nevertheless, nodes running the implementation could still attempt enforcement through the scheduled user-activated mechanism. That possibility keeps the dispute active despite limited miner participation.
The conflict now reaches beyond inscriptions or token activity. It asks whether Bitcoin neutrality means accepting every valid, fee-paying transaction under existing consensus rules.
BIP 110 supporters argue that tighter limits could protect decentralization by reducing long-term operational costs. Saylor argues that the protocol should remain neutral toward transaction intent. The distinction defines the present debate.
His closing line summarized that position clearly: “Bitcoin does not need guardians of purity. It needs guardians of neutrality.”
