A Bitcoin Improvement Proposal known as BIP-110 has sparked intense debate within the Bitcoin community, reopening one of the network’s most contentious governance questions since the Blocksize Wars. The proposal aims to restrict non-financial data on the Bitcoin blockchain, but has divided prominent developers, miners, and industry leaders.
BIP-110 proposes limiting the amount of non-transaction data that can be included in Bitcoin blocks. The proposal is widely seen as a response to the rise of Ordinals inscriptions, which embed data such as images and text onto individual satoshis, and BRC-20 tokens, which use the Ordinals protocol to create fungible tokens on Bitcoin.
Supporters of BIP-110 argue that non-financial uses of the blockchain degrade its primary purpose as a peer-to-peer electronic cash system. They contend that data-heavy inscriptions increase transaction fees for ordinary users, bloat the blockchain, and consume block space that should be reserved for financial transactions.
Opponents, including prominent figures like Michael Saylor, have called the proposal a “dangerous precedent.” They argue that any transaction that follows the protocol’s consensus rules should be considered valid, and that restricting certain types of data amounts to censorship. Saylor and others have pointed out that the market should determine which Bitcoin uses are valuable, not a small group of developers.
The proposal has also drawn criticism from Bitcoin miners, who have benefited from the increased fee revenue generated by Ordinals transactions. In periods of high inscription activity, fees from Ordinals-related transactions have accounted for a significant portion of miner income.
The debate over BIP-110 is set against a key activation deadline, adding urgency to the discussion. If the proposal fails to reach consensus, it could be abandoned or reintroduced with modifications.
The division mirrors the Blocksize Wars of 2015-2017, when the community split over how to scale the network. That conflict ultimately led to the creation of Bitcoin Cash. While no hard fork appears imminent over BIP-110, the intensity of the debate underscores the challenges of governing a decentralized protocol.
This article was adapted from Decrypt. Read the original here.
