The Bitcoin community is in an uproar, and the BIP-110 that the OGs are all paying attention to has sparked a value dispute.

CN
12 hours ago

Written by: Jae, PANews

The Bitcoin network is experiencing a debate that is no less intense than the "block size war" of 2017.

The trigger is a technical proposal known as BIP-110. It attempts to set a limit on the amount of data that can be included in Bitcoin blocks through a soft fork. In simpler terms, it aims to restrict behaviors such as "inscribing" images, videos, or even code onto the chain using protocols like Ordinals and Runes.

The emergence of BIP-110 marks a counteroffensive from the "minimalist" camp led by developer Dathon Ohm against the "liberal" camp.

Supporters say this is a "correction," while opponents criticize it as "extreme conservatism." This debate has spilled over from the technical circles to miners, institutions, and major node operators, even involving community leaders like Adam Back.

This is not merely a data conflict, but a struggle over the definition of Bitcoin's value proposition.

BIP-110, targeting the inscription protocol

BIP-110 did not come out of nowhere; its prototype can be traced back to BIP-444 proposed by Dathon Ohm in October 2025, which aimed to temporarily limit the scale of non-monetary data to observe the network's performance under low load.

Initially, there was just a desire to "observe for a year," but as Bitcoin Core v30 lifted the byte limit on OP_RETURN, fundamentalists became restless, viewing this as a betrayal of Bitcoin's "monetary function" and akin to giving the green light to "blockchain spam."

Thus, Dathon Ohm introduced the stricter BIP-110 last December, with constraints even more stringent than before.

Proponents of BIP-110 argue that these restrictions are not designed to stifle innovation, but to restore the technical caution that Bitcoin maintained in its early days. This set of rules does not affect normal use cases for "payments" and "store of value," but directly targets those non-financial records seen as "data misuse."

55% activation threshold sparks controversy, mob attack or power decentralization?

What really set the community ablaze is the activation threshold set by BIP-110: as long as 55% of the hash power supports it, it can be passed.

In Bitcoin's governance tradition, significant consensus changes typically require 95% of miners' hash rate support to ensure network stability and prevent chain splits. Previous major upgrades like SegWit and Taproot adhered to this unwritten rule.

This threshold's establishment has triggered a massive governance crisis within the community.

Supporters argue that a 95% threshold effectively gives the minority "a veto." Garbage data persists because a small number of stakeholders refuse to budge. The 55% setting is primarily a form of "defensive activation," aimed at breaking the deadlock over protocol upgrades.

Opponents led by Adam Back accused this as "a mob attack on Bitcoin's reputation," attempting to push through rule changes without broad consensus.

A 55% threshold means that as long as a simple majority of miners agree, the remaining 45% of miners and users will be forced to accept it. This is seen as using a low threshold to hijack the entire network, potentially leading to chain splits and resulting in two or even multiple Bitcoin assets.

What is even more frightening is that once this precedent is set, if data can be limited today, can specific addresses be frozen tomorrow? Bitcoin's "immutability" would become a mere facade.

Camps clash, minimalism could cut miners' revenue

The group of developers led by Luke Dashjr and loyal users of the full node client Bitcoin Knots are the underlying driving force behind BIP-110. Their logic is rooted in concerns over the underlying hardware requirements for Bitcoin.

Bitcoin proponent Matthew Kratter likens the inscription protocols to ivy, arguing that although they grow attached to Bitcoin (the tree), they will ultimately collapse the tree's structure, leading to the death of both.

If block space is filled with images, the blockchain's size will grow exponentially. This means ordinary users will be unable to run full nodes using conventional consumer-grade hard drives, thus concentrating verification power in large nodes and undermining the decentralization foundation of Bitcoin.

As the controversy escalates, Bitcoin Knots' market share has surged to 22.49%, while the full node client Bitcoin Core's share has dramatically dropped to 77.39%. This trend indicates that a considerable number of nodes are expressing their support for data limitations by switching clients.

The opposition is composed of influential opinion leaders and miners, featuring a more luxurious lineup.

Strategy CEO Michael Saylor warned that frequent changes to the protocol are the biggest threat to Bitcoin.

Blockstream CEO Adam Back also pointed out that Bitcoin's greatest value lies in its immutability. If rules can easily change based on a portion of people's preferences, the credibility of Bitcoin as "digital gold" would be completely lost.

From an economic standpoint, the controversy over BIP-110 also reflects the community's anxiety regarding Bitcoin's "long-term security budget." As the halving cycle progresses, the security of the Bitcoin network will increasingly rely on transaction fees rather than block rewards.

The transaction fees contributed by non-monetary transactions exhibit extreme volatility. Dune data shows that as of now, daily fees from the inscription protocol have fallen below $10,000, yet they contributed nearly $10 million in a single day in December 2023. With block rewards continuously halving, miners do not want to close off any source of revenue.

Miners generally believe that market cyclical fluctuations should not be a reason to modify the underlying protocol; once the market warms up, these non-monetary transactions will still be an important source of revenue.

Fee market competition is unfair, governance decline poses legal risks

However, the decline in inscription fees has also provided ammunition for supporters. Since the economic benefits from inscriptions have become minuscule, optimizing the network by clearing them (such as reducing UTXO set size and lowering node pressure) appears more cost-effective.

The deeper economic logic behind supporting BIP-110 lies in that the current SegWit discount mechanism effectively subsidizes non-monetary transactions. Under the existing billing rules, storing a 1MB image data is much cheaper than sending a currency transaction of the same size.

BIP-110 aims to end this "unfair competition" by setting a data limit at the consensus level, forcing these "low-value" data to compete for more expensive non-discounted space or to simply leave the mainnet.

Supporters believe that only by doing so can the fee market return to its true state and ensure that those truly willing to pay a premium for "global consensus" in monetary transactions are prioritized for packaging.

However, if a proposal like BIP-110 with a "temporary + low threshold" label is passed, it will break the institutional trust of the Bitcoin network. For institutional investors, Bitcoin's most attractive feature is its immutable rules.

Once a precedent is set, will there be future asset freezes on specific addresses? Or mandatory adjustments based on specific fee rates?

This "governance decline" is the risk that Adam Back and Michael Saylor are most worried about. For Bitcoin, even a protocol plagued with garbage data is stronger than a "premium protocol" that can be modified at any time. Because the latter is unpredictable, and institutions seek certainty.

Furthermore, BIP-110 may turn some existing UTXOs into "dead money," essentially temporarily depriving certain users of their property rights. Such actions may expose miners to accusations of "interfering with private property" on a legal level.

The emergence of BIP-110 is an inevitable product of Bitcoin's growing pains, and its activation remains uncertain, especially given that the 55% threshold faces significant challenges within the community's tradition.

The greatest significance of this debate is that BIP-110 has brought the issue of "data misuse" to the forefront, forcing the community to think about "what exactly should the Bitcoin mainnet carry"?

Bitcoin's greatest value lies not in its unchanging nature, but in the fact that each of its changes undergoes the strictest scrutiny. The future of Bitcoin may become purer because of this debate, or it may open a new chapter of diversification due to this split.

In this value defense battle of digital gold, every user of a running node is casting a precious vote about the future with their hard drive and bandwidth.

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