Image Credit: michael.com
Key Takeaways
- Saylor argues BIP-110’s data restrictions insert human judgment into Bitcoin’s consensus rules and set a censorship precedent.
- He singled out the proposal’s lowered 55% activation threshold as its most dangerous element, warning it raises the risk of a chain split.
- Saylor proposes market-based fees and node-level relay policies as alternatives to a consensus-level restriction.
Michael Saylor, executive chairman and co-founder of Strategy, has publicly opposed a Bitcoin proposal designed to restrict non-monetary data on the blockchain. He argues the change threatens the network’s neutrality and sets a precedent for censorship.
Saylor laid out his objections in a post on X titled “110 reasons BIP-110 is a bad idea.” The post frames Bitcoin Improvement Proposal 110 as a bigger risk than the problem it aims to solve.
What BIP-110 Would Change
BIP-110 proposes a one-year temporary soft fork that adds seven consensus-level restrictions to the Bitcoin protocol. These include caps on data payload sizes and limits on certain script executions. The stated goal is to keep the network focused on monetary transactions rather than general-purpose data storage.
The proposal also lowers the miner-signaling threshold required to activate the change, from the customary 95% to 55%. Backers describe BIP-110 as a return to Bitcoin’s original design as peer-to-peer digital cash. Opponents say it functions as a tool to restrict specific uses of the network.
Saylor’s Core Objection
Saylor’s main argument centers on Bitcoin’s inability to distinguish transaction types. Saylor wrote in the post:
“The proposed cure is more dangerous than the condition. BIP 110 would use consensus to narrow valid activity, constrain future options, complicate deployment, and establish a precedent it cannot later erase.”
Saylor said the network cannot determine whether stored bytes represent an image, a cryptographic proof, a contract, metadata, an authentication record, or an application not yet built. Filtering data by content, he argued, would insert human judgment into protocol rules that were designed to remain neutral.
Lower Threshold Raises Split Risk
Saylor singled out the reduced 55% activation threshold as the proposal’s most dangerous element. He called the lower bar “too aggressive,” warning it raises the odds of a contested activation and a potential chain split.
Strategy holds 843,775 BTC, valued at $54.31 billion as of Sunday, according to the company. Saylor said institutional investors are drawn to Bitcoin because of its stable, permissionless design, an appeal he said would erode if consensus rules start filtering specific use cases.
He also warned of a “chilling effect” on developers, arguing that a restriction targeting data storage today could extend to privacy tools, custody systems, or corporate applications later.
Fee Impact on Miner Security
Saylor argued the proposal carries an economic risk beyond governance. If BIP-110 suppresses certain uses of the network, he said aggregate fee demand could decline.
With the block subsidy continuing to halve on its existing schedule, lower transaction fees could weaken the revenue miners rely on to justify committing hash power, which he said would ultimately weaken network security.
An Alternative: Fees and Relay Policy
Rather than a consensus change, Saylor pointed to two tools he said already exist to manage network congestion: market-based transaction fees and individual node relay policies.
Under this approach, node operators who object to certain data types could simply configure their own software to not relay it. Users who want to include large amounts of data would pay higher fees to compete for block space, rather than facing a network-wide restriction.
Saylor closed his post by urging the Bitcoin community to stay focused on the network’s role as an open, permissionless financial system. “Bitcoin does not need guardians of purity,” he wrote. “It needs guardians of neutrality.”
