Michael Saylor argues against Bitcoin’s BIP-110 proposal

Michael Saylor is pushing back against a proposed Bitcoin rule change that would restrict some non-financial data on the network. For everyday Bitcoin holders, the fight is about who gets to decide what counts as acceptable use of limited block space.

Saylor, the executive chairman of Strategy, published a 110-point essay over the weekend opposing BIP-110, a proposed soft fork aimed at curbing arbitrary data embedded in Bitcoin transactions. A soft fork is a change to a blockchain’s rules that tightens what the network will accept.

In a post on X, Saylor linked to the essay, titled “110 Reasons BIP 110 Is a Bad Idea.” He described it as a case for “neutral rules, hard consensus, open markets, and permissionless innovation.”

Saylor said he agrees with some goals behind the proposal, including keeping Bitcoin validation cheap, payments affordable and Bitcoin focused on sound money. His objection is to the method: using consensus rules, the core rules that determine whether transactions and blocks are valid, to block activity that is currently allowed.

What BIP-110 would do

According to the BIP-110 proposal, the change would temporarily tighten Bitcoin’s consensus rules for roughly a year. The goal is to limit methods used to store arbitrary data on Bitcoin, including inscriptions and Ordinals.

Ordinals and inscriptions are ways of attaching or tracking data on Bitcoin. Since 2023, they have taken up block space and contributed to higher transaction fees, according to the proposal’s critics and supporters cited in the debate.

Supporters of BIP-110, including developer Luke Dashjr and the Bitcoin Knots camp, frame the proposal as a response to spam. Critics argue that the change would cause the network to reject transactions that are valid under current rules and could create a split in the Bitcoin network.

Saylor’s core argument

Saylor’s essay argues that Bitcoin should not use consensus rules to judge the purpose of data inside transactions. He wrote that Bitcoin “cannot read intent,” meaning the network cannot reliably know whether bytes represent an image, a proof, a contract or a future application.

That distinction matters because Bitcoin transactions compete for block space. Users pay fees to have transactions included, and miners choose which valid transactions to process. BIP-110 would move part of that filtering from the fee market into the protocol rules themselves.

Saylor argued that “spam” should not become a basis for consensus enforcement, writing that disapproval of a use “is not invalidity.” In his view, treating one contested use as invalid could create a template for future fights over other tools or applications.

The debate leaves Bitcoin’s community weighing two risks. Supporters of BIP-110 see data-heavy transactions as a burden on users who want cheaper payments and easier validation. Saylor and other critics see the proposed fix as more dangerous than the activity it targets because it changes what the network rejects at the rule level.

This story draws on original reporting from Decrypt.