Michael Saylor Opposes BIP 110, Warns It Could Threaten Bitcoin’s Neutrality
Bitcoin is once again at the center of a debate over proposed changes to its network rules. This time, the discussion revolves around Bitcoin Improvement Proposal (BIP) 110, which seeks to introduce a temporary soft fork to limit the amount of data that can be stored in Bitcoin transactions.
Strategy Executive Chairman Michael Saylor has voiced his opposition to the proposal. In an essay, he outlined roughly 100 reasons why he believes BIP 110 poses greater risks than the problem it aims to solve. However, Saylor emphasized that he is not opposing Bitcoin developers themselves. He said he supports the goals of making nodes cheaper to operate and improving transaction efficiency.
According to Saylor, the issue lies not in the objectives but in the approach. He argues that Bitcoin’s consensus rules should not be used to determine which types of transactions are “acceptable” or “unacceptable” as long as they comply with the network’s existing rules.
BIP 110 is designed to limit the use of block space for storing non-payment-related data. Supporters argue that such activity misuses Bitcoin, which was originally designed as a censorship-resistant payment network.
The proposal introduces seven new consensus rules, including reducing the OP_RETURN data limit to 83 bytes, capping certain data payloads at 256 bytes, and restricting specific uses of Taproot and Tapscript. These rules would remain in effect for about one year. The proposal also protects existing UTXOs created before activation to ensure previously held funds remain spendable.
However, Saylor believes those safeguards are insufficient. He argues that some pre-signed transactions and more complex transaction structures could still be affected. In his view, even temporary consensus changes can have lasting consequences for user confidence.
Activation Threshold Sparks Controversy
One of the proposal’s most controversial aspects is its activation mechanism. BIP 110 requires approval from just 55% of Bitcoin miners, significantly lower than the traditional 95% threshold used under the BIP 9 activation process.
Saylor argues that such a low threshold could divide the Bitcoin community. In his view, Bitcoin’s rules are determined not only by miners but also by node operators, BTC holders, exchanges, wallet providers, and custodians.
If part of the ecosystem adopts the new rules while others reject them, Bitcoin could face a chain split, resulting in two separate blockchains.
Potential Impact on Miner Revenue
Saylor also raised concerns about the proposal’s economic implications. As each halving reduces the block subsidy, miners become increasingly dependent on transaction fees for revenue.
Because some of the transactions targeted by BIP 110 still generate transaction fees, Saylor argues that removing them could reduce miners’ income.
Supporters of BIP 110 counter that limiting data-storage transactions would reduce network bloat and lower the cost of running Bitcoin nodes, helping preserve decentralization.
While acknowledging those concerns, Saylor believes a better solution is to rely on optional relay and mining policies, allowing individual nodes and miners to decide which transactions to process without changing Bitcoin’s consensus rules.
Bitcoin’s Neutrality at the Center of the Debate
For Saylor, the debate over BIP 110 extends beyond OP_RETURN and Taproot. He believes it ultimately concerns Bitcoin’s neutrality.
He questions who should have the authority to decide which uses of the Bitcoin network are legitimate—whether for payments, data storage, privacy, stablecoins, or future applications.
Saylor warns that if Bitcoin’s consensus rules begin banning certain use cases, future restrictions could eventually target privacy tools, financial applications, or other innovations built on the network.
He therefore advocates a more conservative approach: preserving Bitcoin’s base-layer rules, allowing the transaction fee market to function naturally, and avoiding consensus changes that could trigger a governance crisis.
The BIP 110 debate highlights one of Bitcoin’s defining characteristics: meaningful protocol changes require overwhelming community support rather than a simple technical majority.
