BIP-110 debate revives Bitcoin censorship and decentralization concerns

BIP-110, a proposed temporary Bitcoin soft fork also called the Reduced Data Temporary Soft Fork, has intensified a long-running dispute over whether Bitcoin should distinguish between monetary and non-financial uses of blockspace. The proposal would tighten consensus rules to restrict arbitrary data storage by limiting most new outputs to 34 bytes, restoring an 83-byte limit for OP_RETURN outputs, capping certain witness elements at 256 bytes, and temporarily restricting several Taproot features commonly used for inscriptions. Supporters say the measure would reduce blockchain spam and reinforce Bitcoin’s role as money, while critics argue it would invalidate some currently valid, fee-paying transactions and risk a chain split. Michael Saylor renewed that criticism, and Samson Mow has also opposed BIP-110, arguing that protocol changes require broad consensus even as he shares concerns about spam. With mandatory signaling set to begin in August and miner support still around 1%, the fight has become one of Bitcoin’s biggest governance debates in years, reviving arguments over censorship resistance, neutrality and who gets to decide how the network evolves.