BIP-110 aimed to restrict non-financial data on Bitcoin's blockchain, leading to renewed discussions surrounding censorship and decentralization.
By Jamie Crawley, AI Boost|Edited by Shaurya Malwa Jul 14, 2026, 11:01 a.m. 3 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on (CoinDesk)SummaryShow- BIP-110 aimed to temporarily limit specific types of transaction data on Bitcoin's blockchain.
- The initiative sparked discussions about whether Bitcoin should differentiate between "acceptable" and "unacceptable" uses.
- The proposal currently lacks substantial support from miners or the broader industry, making its activation unlikely.
Bitcoin has witnessed a range of challenges, including the collapse of exchanges, government interventions, and internal debates regarding network scalability. Among these issues, a proposal aimed at limiting certain data types on the blockchain has emerged as one of the most divisive governance discussions in recent years.
The Bitcoin Improvement Proposal (BIP)-110 was designed to temporarily modify the network's consensus rules, making many non-financial transactions significantly more difficult.
Proponents view this proposal as a way to return to Bitcoin's foundational purpose as a peer-to-peer digital currency. In contrast, critics argue it seeks to impose restrictions or censorship on certain Bitcoin applications.
Currently, the proposal seems to lack the necessary support for activation, having garnered minimal backing from the industry and faced pushback from numerous prominent Bitcoin developers and investors. Nonetheless, the ongoing debate highlights critical aspects of Bitcoin governance.
Understanding Bitcoin's Purpose
The controversy surrounding BIP-110 revolves around a longstanding question within the Bitcoin community: what is the intended use of Bitcoin's blockspace, or its ability to process data in each block?
The 2021 activation of the Taproot upgrade allowed developers to incorporate various forms of data, including images and text, directly into Bitcoin transactions. This led to the creation of Ordinals, which facilitated Bitcoin's own variant of non-fungible tokens (NFTs), as well as Runes, a protocol for minting memecoins.
Supporters contend that these applications utilize Bitcoin as intended, paying for blockspace and utilizing it as they choose. They argue that it is not Bitcoin's role to dictate the types of data that can be stored on its network.
Conversely, some long-time users, such as developer Luke Dashjr, argue that these applications exploit technical loopholes rather than utilizing Bitcoin for its intended purposes. They contend that the inclusion of excessive non-financial data unnecessarily enlarges the blockchain, complicating the maintenance of decentralization and favoring larger mining operations.
BIP-110 did not aim to completely prohibit non-financial data; instead, it sought to tighten the consensus rules temporarily, rendering inscription methods unfeasible for a year. This timeframe was meant to allow developers to explore long-term solutions while conserving blockspace in the interim.
However, as the debate evolved, opponents raised concerns about subjective evaluations of blockspace usage, arguing that Bitcoin's consensus rules should treat all valid transactions equally, regardless of their purpose. There were worries that setting rules to discourage one type of transaction could lead to future restrictions on others.
BIP-110's Rejection
The approach taken to gain approval for the proposal was also contentious. Bitcoin upgrades typically require overwhelming consensus from miners, businesses, wallet providers, and the broader ecosystem. In contrast, BIP-110 reignited discussions regarding a user-led activation model, which would allow upgraded nodes to enforce new rules if specific conditions were met.
Supporters argued this was necessary to protect against what they viewed as abuses of blockspace if miners did not act. However, critics warned that introducing new consensus rules without widespread agreement could lead to incompatible versions of Bitcoin, reminiscent of the divisive block-size conflicts of 2017.
This is where BIP-110 struggled to secure support. Mining firms had little motivation to reject transactions that offered competitive fees, while institutional investors showed no interest in governance disputes.
Michael Saylor, founder of Strategy, the largest corporate holder of Bitcoin BTC$62,674.06, stated that BIP-110 "turns a spam dispute into a consensus change that would invalidate some currently valid, fee-paying transactions."
"That precedent is the danger," he posted on X on July 11. "We should save our energy for threats that really matter."
Adam Back, a veteran developer and co-founder of Blockstream, has consistently opposed BIP-110.
In the end, the proposal has failed to gather substantial backing from mining pools and appears to have reached a stalemate in attracting broader community support, with only about 0.7% of miners supporting it as of Tuesday.
This situation may be viewed as a pivotal moment in the ongoing discussion regarding the purpose of Bitcoin. Regardless of the outcome, BIP-110 illustrates that meaningful changes require alignment among those who develop software, secure the network, build businesses on it, and ultimately determine which version of Bitcoin holds value.
Bitcoin NewsAI Disclaimer: Portions of this article were generated with the help of AI tools and reviewed by our editorial team to ensure precision and adherence to our standards. For more information, see CoinDesk's complete AI Policy.Related AssetsBitcoin$62,660.960.27%Latest Crypto News- 1Prediction markets just crushed traditional sportsbooks in a massive $50 billion World Cup breakout9 minutes ago
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