A proposal to temporarily restrict certain Bitcoin transactions has triggered one of the sharpest governance disputes in years, drawing in the network’s largest corporate holder, developers, miners, and node operators on opposing sides of a debate that cuts to the heart of how Bitcoin should evolve.
Michael Saylor, whose company Strategy holds approximately 843,775 Bitcoin, published a thread on 21 July opposing the proposal.
“The impulse to change Bitcoin’s rules merely to prevent others from using Bitcoin in ways you disapprove of is statist and alien to a community rooted in liberty, property rights, free markets, natural law, and Austrian economics,” he wrote. “BIP 110 would impose monetary purity by fiat.”
His objection has two dimensions. On principle, he argues that using protocol changes to restrict how others use Bitcoin contradicts the property rights and free market values that give Bitcoin its credibility.
On mechanics, he warns that BIP-110’s 55% miner signaling threshold for activation sits well below the 95% standard that has historically governed permanent Bitcoin consensus changes, raising the risk of a network split.
Saylor described the proposed cure as more dangerous than the condition.
BIP-110 is a one-year soft fork bundling seven restrictions on data-heavy Bitcoin transactions. It emerged in October 2025 after Bitcoin Core’s v30 release removed default limits on OP_RETURN data, allowing arbitrary information to be stored permanently on the blockchain.
Supporters say treating data storage as a supported use case distorts transaction fees, burdens node operators, and forces monetary transactions to compete with non-financial traffic. Opponents say changing the protocol to police how people use Bitcoin crosses a fundamental line.
The proposal is built on Bitcoin Knots, the node software maintained by Ocean CTO Luke Dashjr.
The signal count suggests activation is unlikely under the current timeline. Reportedly, miner support stood at approximately 1.3%. The mandatory signaling period opens around block 961,632, expected near 7 August, with enforcing nodes rejecting non-signaling blocks from around 1 September.
Reactions to Saylor’s post split along existing lines. BIP-110 supporters argued the proposal represents one of the most decentralized interventions possible, with node operators exercising their inherent right to define the network they run.
“Framing BIP-110 as a rule change signals a misunderstanding of Bitcoin’s rules,” wrote one backer. “The rules were always dictated by the community, not the code.”
Critics of Saylor questioned whether his opposition reflected principle or the interests of a corporate balance sheet that benefits from a maximally open Bitcoin base layer.
(adsbygoogle = window.adsbygoogle || []).push({});The BIP-110 debate reflects a tension that runs deeper than any single proposal. As Bitcoin increasingly functions as global financial infrastructure, a growing number of participants believe the base protocol should be treated as effectively complete, with all further innovation directed toward Layer 2 networks and applications built on top. BIP-110’s opponents and supporters are, at their core, arguing about whether that threshold has already been reached.
Related: Jon Atack Advises Bitcoin Users to Pause Transactions Ahead of BIP-110 Activation
