Who decides the rules of Bitcoin? BIP-110 ignites governance disputes

Author: Zhou, ChainCatcher

Recently, BIP-110 has pulled the Bitcoin community back into a familiar yet strange debate.

The familiar part is that the controversy still revolves around on-chain arbitrary data, inscriptions, Runes, OP_RETURN, and the nodes themselves. The strange part is that this time, the participants are no longer just developers and node operators.

Michael Saylor, founder of Strategy, Adam Back, co-founder of Blockstream, mining pools Foundry and Ocean, the Bitcoin Knots node camp, and participants in the Ordinals ecosystem have all intervened in this debate from different angles.

On July 18, Michael Saylor listed 110 reasons against BIP-110 in his lengthy article “110 Reasons BIP-110 Is a Bad Idea”. He believes that this proposal will escalate the garbage data dispute into a consensus rule change and render some currently valid transactions that are willing to pay fees invalid.

This makes BIP-110 no longer just a technical proposal. It begins to question a more fundamental issue within the Bitcoin community: who has the authority to decide what Bitcoin should be.

What is BIP-110: Moving Anti-Garbage from Forwarding Strategy to Consensus Layer

BIP-110, fully known as Reduced Data Temporary Softfork, can be translated into Chinese as "减少数据临时软分叉". Its predecessor was BIP-444, and the original author of the current BIP-0110 is Dathon Ohm.

Image source: FARSIDE

It plans to introduce seven new restrictions through consensus rules over approximately one year, including limiting the majority of new output scripts to within 34 bytes, restoring the OP_RETURN limit to 83 bytes, restricting data pushes over 256 bytes and certain witness items, and temporarily banning some undefined witness versions and Taproot extension paths.

The proposal is set to expire automatically after one year, with existing coins before activation protected by grandfather clauses.

Source: GitHub

In terms of deployment mechanism, according to the original text of bip-0110, the proposal uses a bit 4 miner signal with a threshold of 1109/2016, which is 55%. The mandatory signaling period is set from block 961,632 to 963,647, locking in no later than 963,648, and activating at 965,664.

Supporters argue that inscriptions, Runes, and other non-monetary data occupy block space, increasing the long-term burden on full nodes and diverting developers' attention from Bitcoin's core task as a monetary network.

What truly sparked controversy is that BIP-110 pushes this matter to the consensus layer. In the past, nodes could choose not to forward certain transactions, and miners could choose not to package certain transactions. BIP-110 aims to directly render some currently valid transactions invalid at the protocol layer.

This changes the nature of the issue.

v30 and Node Forwarding Strategy: Why Supporters Say Default Governance Has Failed

One of the backgrounds of BIP-110 is the adjustment of the default strategy for OP_RETURN in Bitcoin Core v30.

According to the release notes of Bitcoin Core 30.0, the default value for datacarriersize has been raised to 100,000, effectively relaxing the default limit on OPRETURN data carriers. Users can still manually set datacarriersize back to 83 to restore the old limit. Multiple OPRETURN outputs in the same transaction are also allowed to be forwarded and mined, with the limit calculated based on the aggregate size of all relevant scriptPubKeys.

Here, it is necessary to distinguish three layers. The forwarding strategy determines what nodes default to forwarding, the mining strategy determines what miners default to packaging, and the consensus rules determine whether a block is valid. v30 adjusts the first two layers, while the controversy over BIP-110 lies in its attempt to push the policy dispute of the first two layers into the third layer.

The rationale from the Core side is that this change belongs to forwarding and mining strategies and does not touch on consensus rules. Since users can continue to maintain an easily bypassed default limit through other script paths, private forwarding channels, or directly submitting data to miners, it only creates a false sense of security. Default node software should be closer to transactions that miners and the market are likely to accept, in line with consensus rules.

Supporters of BIP-110 do not accept this explanation.

According to early Bitcoin participant secsovereign in response to Saylor's lengthy article Response to Michael Saylor's 110 Reasons, the situation today has been pushed to this point by the development of infrastructures such as direct submission APIs, alternative forwarding networks, and private connections of mining pools. These allow transactions to bypass the default filtering of public nodes and reach miners' block templates directly. The inscriptions themselves did not break the balance; they merely exposed that it had long been lost.

According to this narrative, the node forwarding strategy has long ceased to be enforceable. It is disclosed that the Core v30 relaxation of the OP_RETURN default limit is viewed by supporters as formalizing this loss of control. Since the strategy layer cannot hold, the boundary must be moved to the consensus layer.

What this section truly touches on is not OP_RETURN itself, but the power of default software. Bitcoin Core has not changed the consensus rules, yet it can influence the actual behavior of a large number of nodes and miners through default strategies.

Supporters believe that the action of changing the v30 default strategy has no signaling window and no threshold, completed by a few individuals holding code merge permissions. In contrast, BIP-110 adopts a 55% miner signal, which has a higher threshold than the one it aims to correct.

Opponents argue that the failure of the strategy layer does not automatically prove that consensus layer restrictions are legitimate, effective, and low-risk solutions.

Adam Back's Rebuttal: Technical Consensus Itself is Bitcoin's Immune System

The most complete first-principles argument against BIP-110 comes from Adam Back, co-founder of Blockstream and designer of hashcash.

According to Adam Back's post, he personally detests garbage data, and the design of hashcash was indeed related to anti-garbage. However, he believes that the foundation of Bitcoin as a permissionless currency is that no one can impose their value judgments on others.

In his statement, users can modify their own software but cannot modify others' software. The side effect of decentralization is that there are no police in the network, nor is there an authority that can determine legitimate uses for everyone.

Back also refers to the technical consensus process of Bitcoin as a form of protective resistance. Any protocol change must undergo scrutiny from a large number of developers and protocol observers. This technical consensus, similar to the IETF, although slow, can prevent unproven changes from eroding the foundational attributes of the system.

Therefore, his opposition to BIP-110 falls on the governance level. He discloses that if supporters cannot accept the status quo, they can unite to fork, but Bitcoin will not join.

Ironic Blow: Even if Activated, BIP-110 May Not Block Arbitrary Data

BIP-110 also faces a more practical problem. Even if it is activated, it may not truly block arbitrary data.

According to RustBitcoin maintainer Martin Habovštiak in March, he wrote a 66KB TIFF image in a single transaction without using OPRETURN, Taproot, or OPIF, and it can be publicly verified and decoded on-chain into a complete file.

This indicates that as long as Bitcoin still allows sufficiently complex state transitions, data can be split, encoded, or disguised to enter the chain.

Tools for circumventing are also taking shape. Leonidas, co-founder of Runestone, pointed out that he is launching an open-source client called DOG Mode, specifically to relax BIP-110's restrictions on non-financial data. It does not change consensus rules and does not require voting; it only changes the forwarding rules of individual nodes. As long as enough nodes and miners accept it, related transactions may be propagated and confirmed.

@secsovereign pointed out that BIP-110 mainly blocks large continuous data channels but cannot completely seal off distributed data stuffing. Therefore, a separate minimum output value proposal is still needed to address the issues brought by dispersed outputs.

This puts BIP-110 in an awkward position. It bears the risk of consensus change but may not be able to completely achieve its cleaning goals. It can increase the cost of data embedding but is unlikely to end the data war.

Miners and Nodes: PoW Constitution, Knots Sovereignty, Foundry Hash Power Voting

The activation mechanism of BIP-110 has resurfaced the old contradictions between miners and nodes.

F2Pool co-founder Wang Chun stated that PoW is the constitution of Bitcoin, and nodes should respect miners. This represents a core view of the miner faction: without miner support, a soft fork, especially a UASF with a mandatory signaling period, is unlikely to gain legitimacy at the execution level. He has previously expressed opposition to BIP-110, arguing that protocol upgrades should not mimic the bundling bills of American politicians.

The answer from the Knots node faction is entirely different. @MarcanoFilms believes that the more than 15,000 nodes currently running RDTS rules are genuine sovereign operators, not the product of witch attacks. Each node equally executes consensus rules, and the protocol layer does not grant more validation rights to a node simply because it belongs to a large exchange.

Mining pools themselves are also expressing their positions through actions, and in opposite directions. In March, the first block supporting the BIP-110 proposal was mined by Ocean pool. Ocean recently stated that it will upgrade its backend to independently follow multiple chains in the event of a chain fork caused by BIP-110 and will operate as two mining pools from the fork point.

The leading mining pool Foundry has handed over decision-making power to its clients, allowing mining pool accounts to vote weighted by average hash power. Only when the number of affirmative votes exceeds 51% of the voting hash power will it switch to supporting BIP-110 signals.

Miners, nodes, and mining pools are all answering the same question in their own ways. The legitimacy of Bitcoin upgrades ultimately comes from PoW, from node execution, or from the mutual checks and balances of both. The side holding the real signaling power has not yet reached a unified opinion internally.

BlockSlop: When Forks Transition from Verbal Warfare to Upgrade Paths, Engineering Risks Begin to Emerge

It is against this backdrop that a technical tail risk has been publicly disclosed.

According to a lengthy article titled “BlockSlop: BIP 110 Consensus Bug Public Disclosure” published by researcher Dathon Pwn, there is a consensus vulnerability in the activation client of BIP-110 on a late upgrade path. (Note: The discloser Dathon Pwn and proposal author Dathon Ohm are two different individuals; Pwn means to hack in hacker terminology.)

It is disclosed that the problem does not lie in BIP-110's new rules being unable to check new blocks, but rather that nodes may first accept a certain block under the old rules and then continue to trust the original database when enabling BIP-110, without revalidating that history according to the new rules.

In other words, a late-upgrade node retains a historical block that is valid under the old rules but should be rejected under BIP-110. Another brand new BIP-110 node rejects the same block when verifying from scratch. Both claim to have enabled BIP-110 but provide different answers for the same history.

Dathon Pwn also emphasizes that this does not mean the mainnet has already split, nor does it mean that installing the software will trigger the problem. The triggering condition is that there are indeed blocks on-chain that are valid under the old rules and invalid under the new rules, and that the node has already accepted and stored them before enabling BIP-110.

The weight of this discovery lies in its timing. It appears at a moment when Foundry is consulting miners on whether to signal, presenting a preconditioned but fixable upgrade path defect to all participants who may mine, settle, or build on this chain. For miners, exchanges, wallets, and custodians, hidden divergences are often more difficult to handle than open forks.

Corporate Treasury's Involvement: A New Variable in Protocol Politics

Returning to Saylor, his involvement adds a new weight to this debate.

In his article “110 Reasons BIP 110 Is a Bad Idea,” he opposes BIP-110's adoption of a 55% miner signal threshold, arguing that this is clearly lower than the 95% standard of BIP-9 and eliminates the usual timeout and failure states, which may increase coordination errors, chain splits, and market uncertainty.

He also believes that block space fees, node forwarding strategies, miner strategies, pruning, and Layer 2 tools can address related issues without changing consensus.

According to him, even if the rules are only temporarily effective, the governance precedent they establish may still exist long-term, making this proposed governance scheme more dangerous than the problems it aims to solve.

Saylor's uniqueness lies in the fact that he represents BTC holders at the level of publicly traded companies. According to the latest disclosure, Strategy holds 843,775 BTC.

It is neither a mining pool, nor a Core maintenance team, nor an ordinary node community, but its balance sheet can influence the market's judgment of which chain is BTC.

What he possesses is narrative power and weight in the capital market. He can influence how the market and media interpret this controversy, provide legitimacy to one side, and amplify his preferences in the capital market.

In the last round of Bitcoin governance disputes, the stage was usually occupied by developers, miners, node operators, and even exchanges. This time, the balance sheet of a publicly traded company has also stepped onto the stage of protocol politics. This may be the biggest change left by BIP-110.

Conclusion

Putting these five forces together, what BIP-110 truly exposes is clear. Bitcoin does not have a universally recognized arbiter.

Miners hold the hash power but are internally divided. Node operators advocate for equal validation and refuse to weight by economic size. A few developers hold code merge permissions and can actually change the default for the entire network, yet lack an accountability mechanism for node operators who bear permanent costs.

Treasury holders wield narrative and capital but have no votes on-chain. Meanwhile, the technical consensus process represented by Adam Back treats the resistance to changes themselves as a source of legitimacy.

Each faction cites different bases of power and competes for the interpretation of the terms neutrality and conservatism.

BIP-110 may ultimately fail to activate, but it has already completed a governance stress test.

When the claims to defend the monetary boundary and maintain protocol neutrality collide head-on, each side will claim that they are the ones defending Bitcoin. The real core of this controversy is who has the authority to decide what Bitcoin is.