5 keys to understand the debate in Bitcoin about the BIP-110

Improvement Proposal 110 (BIP-110) reactivated a dispute that expanded between the community of Bitcoin developers and users throughout 2025: whether the network should tolerate non-financial uses or be limited exclusively to a monetary system.

Therefore, this article will review five keys to understanding the conflict around BIP-110:

1) What is it, what is it for and how did BIP-110 originate?

BIP is a standard document for proposing changes or new features in Bitcoin. In this framework, BIP-110 emerges as a proposal for soft fork (soft fork) to restrict non-financial uses of the network, as reported by NoticiasVE.

Its intention is the use of Bitcoin as a digital money system, prioritizing payments and settlements over those non-monetary uses that compete for space in the blocks (transactions intended to store arbitrary data, such as images, text, for example)

BIP-110, dubbed “temporary soft fork to reduce data,” was created by an anonymous developer who operates under the pseudonym Dathon Ohm.

Originally known as BIP-444, the proposal was formally identified as BIP-110 once its code was integrated into the official Bitcoin repository.

At the time of this article, the document is in draft status, indicating that is in its earliest phase of development and subject to active debates within the community.

2) How does BIP-110 work?

The proposal tightens the acceptance criteria in the nodes through strict validation rulesdesigned specifically to mitigate the propagation of arbitrary data on the chain.

This mechanism operates at the network policy level (node policy) instead of being a total rewrite of the protocol, allowing a control over information traffic.

In practical terms, the proposal seeks to prevent the network from being used to insert data that does not have monetary purposes, without affecting normal bitcoin transactions between users. The idea is to reserve space in the blocks for payments and settlements.

3) What is the alleged problem that BIP-110 seeks to solve?

The BIP-110 arises as a response to what some bitcoiners consider spam on the network, that is, transactions that do not pursue monetary purposes. Much of this traffic is associated with registrations through the opcode OP_RETURN and protocols such as Ordinals.

For detractors of these uses, the inclusion of such arbitrary inscriptions in Bitcoin increases the size of the chain and raises the operating costs of the nodes.

In return, the developers of the reference client, Bitcoin Core, and their followers, defend and promote freedom of use in Bitcoin. By May 2025, almost half of the transactions They were not financiala trend that extended until the end of that year, as reported by NoticiasVE.

BIP-110 warns that increasing the OP_RETURN field to 100,000 kilobytes (kB) in Bitcoin Core version 30 (v.30) allows embedding large volumes of non-financial data, such as images or files. This capacity raises concern about the possible inclusion of illegal materialwhich would expose node operators to legal and ethical risks by being forced to store such content.

4) The debate on BIP-110: principles, governance and costs

The BIP-110 proposal divides the community between those who demand a technical cleanup and those who fear the fragility of the consensus.

Journalist Hodlonaut and bitcoin community founder Maya Parbhoe encourage the call to action. Both consider that the policies of Bitcoin Core allowed a systematic abuse of block space through inscriptions.

Parbhoe claims that “Ordinals do not belong in Bitcoin” and that they represent a vector of exploitation.

Analyst George Bodine joins this position, who introduces a normative argument. He maintains that illegal and obscene content harms node operators and must be made artificially more expensive.

From the BitMEX team they offer a different reading. The analysis firm suggests that Bitcoin Core did not push controversial policies, but instead reacted slowly. They attribute the current scenario to miners like the MARA company (MARA) and relay services that facilitated the spread of these transactions.

Adam Back, co-founder of Blockstream, rejects the idea of ​​prohibiting the «spam«. According to Back, tightening the rules will have the opposite effect: attackers will hide data in structures that are more complex and expensive to process.

Political risk also generates important alerts. Developer Wicked warns that a failed activation attempt (by BIP-110) “coordination capital burn”. This would reduce the community’s ability to organize future necessary changes without fragmenting the network.

On the other hand, the founder of the Bull Bitcoin wallet, Francis Pouliot, reinforced Wicked’s vision with a historical lesson. For him, Bitcoin’s greatest strength is that no one can modify its rules arbitrarily to solve temporary use problems.

Bitcoin analyst Justin Bechler believes that a million dollar bitcoin it depends of three factors:

• Of the credibility of its monetary policy.

• Of his resistance to censorship.

• Of the network of nodes that enforces both.

If one of them weakens, the entire argument would lose force. Bechler presents the BIP-110 as a temporary brake to recover 36% of block spacewithout affecting financial transactions.

Debate compilation

• Hodlonaut of the Mambhoe: They promote BIP-110 to stop the use of inscriptions and Ordinals on the main chain.

• Adam Back: He argues that technical restrictions shift unwanted content toward more costly cloaking methods for nodes.

• Wicked: He warns that failed activation fragments consensus and exhausts the community’s capacity for political coordination.

• Francis Pouliot: He argues that the immutability of the rules protects Bitcoin from governance captures and arbitrary changes.

• Justin Bechler: He estimates the move would recover 36% of block space by filtering non-financial transactions for a year.

5) How could BIP-110 activate (or fail)?

The BIP-110 contemplates two possible activation pathwaysboth through a smooth fork (soft fork)that is, a rule change compatible with non-updated nodes, at least in its theoretical design.

• Scheduled Activation (Flag Day): The main track sets a deadline of 2026 (specifically upon reaching block height 893,100). From then on, data restriction rules would be automatically activated for the upgraded nodes, ignoring any blocks containing prohibited data.

• Reactive Activation and Reorganization: would allow the rules to be activated immediately if illegal material is detected. This could force a retroactive reorganization of the chain to invalidate already mined blocks containing such content, preventing it from being permanently recorded in Bitcoin history.

The author admits that, unlike other soft forks, this mechanism could cause a temporary chain split, since non-updated nodes would continue to accept blocks that the BIP-110 considers invalid.

However, he maintains that this risk would be an acceptable cost to prevent the persistence of illicit contentwhich moves the debate from the technical to the normative and philosophical.

Additionally, the proposal includes a one-year sunset clause, after which the rules would be void unless the community decides to renew them.

Finally, the rejection or non-adoption of BIP-110 does not depend on an update to Bitcoin Core, the most widely used network client. Since the proposal is not part of that client.

Its implementation would require node operators voluntarily install the Bitcoin Knots softwarethe client from which the proposer drives its activation.

In that framework, if a critical mass of nodes decides not to install Knots or apply the soft fork, BIP-110 simply does not activate, reinforcing that its fate is tied to the social and operational consensus of the network, not a centralized development decision.