Conflict is growing among developers, miners, companies and users over Bitcoin consensus-rule change proposal BIP-110.

Decrypt, a blockchain media outlet, reported on July 15 that the proposal’s core is to temporarily restrict several ways of inserting non-financial data into Bitcoin transactions.

The dispute centers on what Bitcoin should be used for, and who sets that standard. Supporters see it as a way to reduce blockchain spam and strengthen Bitcoin’s role as money. Opponents believe it could invalidate some currently valid, fee-paying transactions and set a risky precedent for future protocol changes.

BIP-110 is a soft-fork change. It would limit new transaction output sizes to 34 bytes and reapply an 83-byte limit to OP_RETURN outputs. It would also bundle some validation elements at 256 bytes and temporarily restrict some Taproot features. Bitcoin transactions can carry information such as text, images and token metadata in addition to simple transfers, and BIP-110 would narrow that range of uses.

Market reaction is sharply split. Michael Saylor said there are many risky issues for Bitcoin besides spam, and criticised BIP-110 for pulling the spam dispute into a consensus-rule change. He argued that the precedent of invalidating currently valid, fee-paying transactions is itself a bigger risk.

Jameson Lopp (제임슨 롭), chief security officer at Casa, also pointed to censorship resistance and predictability as Bitcoin’s strengths. He said BIP-110 could signal that it is possible to censor transactions deemed subjectively undesirable and could weaken Bitcoin’s image as permissionless programmable money.

In contrast, Adam Back (아담 백), chief executive of Blockstream, stressed that Bitcoin’s decentralised structure means users cannot impose preferences on other participants. He said the technical consensus process is designed not to change easily, and drew a line by saying that those who disagree can create a fork, but Bitcoin itself will not join that fork.

Actual miner support remains weak. BIP-110’s mandatory signaling period begins in August, and the share of miners that have indicated support so far is estimated at about 1 percent. Separate from the level of support, the debate is spreading into one of the biggest Bitcoin governance disputes in recent years.

Behind the conflict is Ordinals, which emerged in early 2023. The protocol, created by Bitcoin developer Casey Rodarmor, allows digital content such as images, text and videos to be inscribed directly onto satoshis, Bitcoin’s smallest unit. As Ordinals and BRC-20 tokens spread, demand for Bitcoin block space increased and transaction fees rose. Supporters say those fees increase miner revenue and help long-term security.

Opponents see inscriptions not as normal financial transactions but as spam that exploits the network. This difference in perspective has led to the clash over BIP-110.

Samson Mow (샘슨 모우) argued that Bitcoin participants should be seen as an alliance rather than a single community. He meant that developers, miners, companies, educators and users each contribute to the network in different ways. He said he shares concerns about blockchain spam, but opposes BIP-110 because protocol changes require broad consensus. He also criticised the recent OP_RETURN policy change process, saying GitHub blocks and non-public consent handling escalated conflict.

The debate is also compared with the blocksize war that ran from 2015 to 2017. At the time, conflict erupted over the 1MB block size limit, and the camp that wanted larger blocks ultimately split into Bitcoin Cash and Bitcoin SV. Because of that precedent, the conflict over BIP-110 is spreading beyond a technical discussion into a phase that also tests the Bitcoin network’s decision-making structure and the possibility of fragmentation.

PSA: “Inscriptions” are exploiting a vulnerability in #Bitcoin Core to spam the blockchain. Bitcoin Core has, since 2013, allowed users to set a limit on the size of extra data in transactions they relay or mine (`-datacarriersize`). By obfuscating their data as program code,…