If you’ve spent any time in Bitcoin circles this July, you’ve heard the phrase “BIP-110” tossed around like a grenade. Depending on who’s talking, it’s either the thing that saves Bitcoin from becoming a JPEG dumpster or the thing that turns Bitcoin into the very censorship machine it was built to resist.
Both sides think they’re protecting Bitcoin. That’s what makes this fight worth understanding and not picking a side, but seeing the shape of the argument. And underneath that shape, there’s a deeper question neither camp is asking out loud.
Wait, what is BIP-110?
BIP-110, nicknamed the “Reduced Data Temporary Softfork,” is a proposed rule change aimed at Ordinals, BRC-20 tokens, and other non-monetary data that people have been inscribing directly onto the Bitcoin blockchain since 2023. Supporters call this data spam. The people using it call it a legitimate use of block space they’ve paid for, fair and square.
The proposal would temporarily cap the amount of arbitrary data a transaction can carry, then automatically expire about a year after activation. Existing inscriptions wouldn’t be affected; this only applies to new transactions going forward.
As of this week, the numbers tell an awkward story: less than 1% of Bitcoin’s mining power has signaled support for the change. Meanwhile, prominent voices like Michael Saylor have publicly argued that Bitcoin doesn’t even have a spam problem, citing rock-bottom transaction fees as evidence. Others, like developer Luke Dashjr, insist the proposal is too far along to cancel and frame it as an existential fight for what Bitcoin is supposed to be.
That’s a real split, not a manufactured one.
What did Satoshi actually intend?
Before taking either side, it’s worth going back to the source. Satoshi Nakamoto’s Bitcoin whitepaper is nine pages long. Nine. The entire vision fits in a document shorter than most school essays, and every sentence is about one thing: a peer-to-peer electronic cash system that removes the need for trusted third parties.
“What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.” — Satoshi Nakamoto, 2008
The word “data” appears in that document only in the context of transaction data ownership records and timestamps. Satoshi never described the blockchain as a file system. The people putting images, videos, and arbitrary data into Bitcoin blocks found a loophole introduced by later protocol upgrades. Using a loophole isn’t the same as having a right, and that distinction matters when we’re trying to understand what this debate is really about.
The case for BIP-110
The strongest argument isn’t really about taste; it’s about node costs. Every full node on the network has to store and verify everything written to the chain, forever. Arbitrary data images, text, and tokens impose a permanent cost on every node operator, while the miner who included the data collects the transaction fee only once.
In 2025, non-monetary data consumed 37% of Bitcoin’s block space. Bitcoin Core v30 responded not by tightening limits, but by removing the existing 83-byte OP_RETURN cap entirely, moving toward fewer restrictions, not more. Follow that trajectory forward a decade and ask a simple question: if running a full node eventually requires data-center-grade hardware and bandwidth, who runs the nodes? And whose interests do they serve?
If the answer is AWS, BlackRock, and Coinbase, then “permissionless” becomes a technicality rather than a reality. That’s the exact kind of centralization Bitcoin was designed to prevent. It’s also the failure mode that shows up slowly, quietly, and is easy to dismiss until it’s already entrenched.
The case against it
The strongest counterargument is philosophical, and it’s a good one: Bitcoin’s entire premise is that valid transactions aren’t judged by content. If you pay the fee and follow the rules, your transaction goes in the block, full stop. Once the network starts making exceptions based on what a transaction contains rather than whether it’s valid, critics argue you’ve opened a door that’s very hard to close. Today it’s Ordinals. Tomorrow, who decides what counts as spam?
There’s also a legitimate cultural argument worth taking seriously. Ordinals and Runes brought new people into Bitcoin: artists, builders, and collectors who actually learned how the protocol works: UTXOs, fees, the mempool, and self-custody. That’s nothing. Forced engagement with Bitcoin’s actual mechanics is a form of education that no campaign or marketing effort has managed to replicate.
And there’s a cold economic argument: as Bitcoin’s mining reward keeps shrinking every four years, transaction fees are supposed to pick up the slack. Ordinals and Runes have been a real source of that fee revenue. Miners signaling under 1% support suggests they’re not eager to cut off that spigot on principle.
The governance problem nobody’s talking about
Here’s what both camps tend to skip over entirely, and it may be the most important piece of context in this whole debate.
Bitcoin Core’s development has become significantly concentrated. In 2025, a single developer funded by one organization merged 56% of all changes to the Bitcoin Core codebase. The institutions funding Core developers have financial stakes in the inscription and NFT ecosystem built on top of Bitcoin. That’s not an accusation of corruption; it’s a structural observation. When the people maintaining a protocol have financial ties to one particular use case of that protocol, their judgment is compromised even if their intentions are good. That’s why judges recuse themselves. That’s why auditors can’t audit their own clients.
Bitcoin was designed specifically to make concentrated control impossible. A protocol worth trillions of dollars, with no formal accountability mechanism for the people who maintain it, is a governance failure that Satoshi’s design assumed would be handled informally, and the data suggests it hasn’t been. This isn’t a conspiracy theory. It’s a documented structural reality that both camps should find deeply uncomfortable, regardless of where they stand on BIP-110 itself.
Could a Layer 2 just… fix this?
This is the part that doesn’t get talked about enough. In theory, yes, inscriptions could live on a sidechain, a rollup, or a dedicated “data lane” that batches thousands of them into one small commitment on the main Bitcoin chain, similar to how Ethereum handles its own bloat problem with rollups.
But here’s the catch nobody wants to say out loud: the entire appeal of an Ordinal is that it sits on Bitcoin itself, the most secure, most permanent, most battle-tested ledger in existence. Move it to Layer 2, and you’ve built something that behaves like Bitcoin but technically isn’t Bitcoin. For a lot of collectors, that’s not a fix. That’s the thing they were trying to avoid in the first place.
If inscriptions are batched, individual owners would also have to accept a strange new reality: their inscription isn’t “final” the moment they send it; it’s final only when the batch it belongs to settles on-chain. That’s a fundamentally different kind of ownership than what Ordinals currently promise, even if it’s cryptographically just as secure.
The twist: two ways to lose, and no easy way to know which one you’re risking.
Here’s the thing both camps tend to skip past: they’re each optimizing against a different failure mode, and neither one is imaginary.
The pro-BIP-110 camp is guarding against a slow bleed: node costs creeping up year after year until running your own node quietly stops being something ordinary people can afford, at which point “permissionless” becomes a technicality rather than a reality.
The anti-BIP-110 camp is guarding against a sudden break: a contentious rule forced through on razor-thin, disputed support (currently under 1% of mining power), the same shape of event that’s split other chains before.
One risk shows up gradually and is easy to dismiss until it’s already entrenched. The other shows up all at once, but only if it actually happens. That asymmetry is worth sitting with.
But here’s what both camps are missing: Satoshi built Bitcoin specifically so that question would never need to be answered by any person, institution, or majority vote. Every move that makes “who controls this?” an answerable question, whether it’s institutional concentration in Core development, blockchain bloat that prices out home node operators, or a chain split that only well-capitalized players can navigate, is a move against Bitcoin itself.
The enemy isn’t the other camp. The enemy is centralization in any form.
A path forward that doesn’t require either side to surrender
Rather than choosing between BIP-110 as written and doing nothing, there’s a third option that neither camp has seriously proposed: structural reform.
Two specific changes could resolve the underlying tension without requiring a chain split or a culture war:
First, a governance reform BIP. Mandatory public funding disclosure for any Bitcoin Core contributor. A rotating, elected multi-stakeholder council representing node operators, miners, and independent developers that must formally acknowledge major protocol changes. And a restoration of the 90%+ miner signaling threshold for any consensus change. That’s not bureaucracy. It’s the formal accountability layer that Satoshi’s design assumed would exist informally and which the current concentration of development influence has demonstrated it cannot provide on its own.
Second, a node-operator cost protection standard. A measurable, binding commitment backed by both Core and Knots implementations that full-node operation must remain achievable on consumer hardware for a defined period. This gives both sides a shared metric that doesn’t require them to agree on the data-vs-money debate. It creates a structural check on runaway bloat regardless of who wins that argument.
Neither proposal tells anyone what they can or can’t put on Bitcoin. Neither picks a side in the Ordinals debate. Both protect the one thing Satoshi was explicit about: that ordinary people running a node can verify the ledger themselves.
The question worth asking
So here’s the question worth asking yourself, whichever side you lean toward: if the cost of unlimited data on Bitcoin is that ordinary people can no longer afford to run nodes that verify the ledger? And whose interests do they serve?
Because the moment that question has a comfortable answer, Bitcoin has already lost.
Bitcoin4Newbies.com is not affiliated with any Bitcoin developer, mining pool, or protocol team. This piece is for education, not investment advice; always do your own research before acting on anything crypto-related.
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