ELI5: What the Heck is BIP-110?
Imagine Bitcoin is a giant shared notebook that everyone uses to write down things like:
“I paid you 0.05 Bitcoin.”
For years, people mostly just wrote payment notes. Then in 2022–2023 some clever folks figured out how to paste huge pictures, memes, NFT art, and random junk directly into the notebook (this is Ordinals, inscriptions, BRC-20 tokens, Runes, etc.).
The notebook got bloated. Fees went crazy for normal payments. Running a Bitcoin node (keeping a full copy of the notebook) became harder and more expensive.
BIP-110 (also called the Reduced Data Temporary Softfork or RDTS) is basically a temporary rule that says:
“For the next one year only… no more giant doodles in the notebook. Just write your money notes.”
Technically it’s a temporary soft fork that:
- Limits how much arbitrary data you can stuff into transactions
- Restores the old 83-byte limit on OP_RETURN
- Caps data pushes at 256 bytes
- Restricts some Taproot features that were being abused for data storage
After about one year the rules automatically expire. And any Bitcoin you already own is 100% safe (grandfathered in).
That’s it. Simple as that.
The Case FOR BIP-110
Supporters (many of them running Bitcoin Knots) argue:
- Bitcoin should be money first — not a permanent data storage layer or NFT casino.
- Big data “spam” makes block space expensive for real payments and increases the cost of running a node → hurts decentralization.
- It’s only temporary (1 year) and carefully designed so normal payments, Lightning, multisig, etc. still work perfectly.
- It sends a strong cultural signal: “We will actively resist turning Bitcoin into something it’s not.”
- Existing coins are permanently protected. No one’s money gets frozen.
In short: “Keep Bitcoin pure money.”
The Case AGAINST BIP-110
Critics (including Michael Saylor, Adam Back, Jameson Lopp, and most of Bitcoin Core) fire back hard:
- Changing consensus rules to ban currently valid, fee-paying transactions feels like censorship. Once you start deciding which uses are “good,” where does it stop?
- The activation method is aggressive (low 55% miner threshold + mandatory User-Activated Soft Fork). This creates real risk of chain splits and chaos.
- It doesn’t even fully stop spam — people will just find other ways to embed data.
- It temporarily breaks or restricts some useful advanced features (deep Taproot trees, OP_IF in certain scripts, upgrade hooks).
- Bitcoin is supposed to be permissionless and neutral — “money for enemies.” Policing use cases undermines that core value.
Saylor famously said:
“There are 110 things more dangerous to Bitcoin than spam.”
Current Status
Here’s the reality check:
- Miner signaling: Stuck at roughly 0.8–1%. Has never come close to the 55% needed for early activation. Zero major mining pools support it.
- Node adoption: Still in the low single digits (mostly Knots users). Bitcoin Core has not adopted the code.
- Mandatory signaling window: Opens in early August 2026.
Most likely outcome?
BIP-110 fails to become the main Bitcoin chain.
It will either quietly die or create a short-lived minority fork that almost nobody uses. The economic majority (exchanges, big holders, miners, wallets) simply isn’t behind it. Prediction markets currently give it a very low chance of success.
This is classic Bitcoin: loud social media drama, very little actual hashrate or economic support.
Do You Need to Do Anything If You Own Bitcoin?
Short answer: No.
Here’s why you can relax:
- Your existing Bitcoin is completely safe. All pre-activation coins are permanently exempt from the new rules.
- Normal wallets, exchanges (Coinbase, Binance, Kraken, etc.), hardware wallets, and Lightning will keep working exactly as they do today on the main chain.
- You do not need to move your coins, update software, or panic-sell.
Only take action if:
- You run a full node and want to take a side (run Bitcoin Knots with RDTS if you support it, or stick with Bitcoin Core if you don’t).
- You have extremely exotic/old scripts (99.9% of people don’t).
Final Thoughts
BIP-110 is a passionate attempt by one camp to “clean up” Bitcoin and refocus it on being sound money. The other camp sees it as a dangerous overreach that threatens Bitcoin’s neutrality and upgrade path.
Right now, the market and miners are voting with their feet (and hashrate) — and they’re voting no.
As a regular Bitcoin holder, the best thing you can do is stay informed, avoid the drama, and keep stacking sats (or holding what you have). Bitcoin has survived far bigger fights than this.
The protocol is antifragile. Loud arguments are a feature, not a bug.