Saylor Rejects BIP 110, Warns Softfork Threatens Bitcoin's Neutral Rules

Strategy founder Michael Saylor published a lengthy essay on July 18, 2026, rejecting BIP 110, a proposed Bitcoin softfork that would temporarily restrict several types of transactions carrying non-payment data. The essay lists 100 numbered arguments against the proposal, which Saylor says amounts to using Bitcoin’s consensus rules to discourage a disputed but currently valid category of transactions. He frames the piece as a critique of the proposal, not the developers behind it, and says he shares their underlying goals of affordable node operation and cheap payments.

BIP 110, titled the “Reduced Data Temporary Softfork,” reached Complete status on June 25, 2026, indicating the authors recommend adoption but no community consensus has been established. The proposal would run for roughly one year and add seven new consensus restrictions, including limits on OP_RETURN outputs, pushed payloads, witness items, Taproot annex and control blocks, and a ban on spending undefined witness and Tapleaf versions. Existing UTXOs created before activation would be grandfathered, but Saylor warned that pre-signed transaction workflows could still face new constraints.

Saylor focused heavily on the activation threshold. BIP 110 uses a 55% miner-signaling threshold, well below the standard 95% in BIP 9, and removes the conventional timeout and FAILED state, adding a mandatory-signaling period. He argued that a lower threshold for a contested rule change raises the odds of a chain split, since miners represent only one group among holders, exchanges, wallets, and custodians.

Regarding the fee market, Saylor noted that transaction fees make up a growing share of miner revenue as block subsidies halve. He said BIP 110 does not model how suppressing one category of transactions could affect total fee demand, miner incentives, or long-term network security. He pointed to Bitcoin Core’s existing relay and mining policy tools as less disruptive alternatives, and noted the proposal cannot fully stop data embedding.

Saylor closed by describing BIP 110 as a governance risk rather than a technical fix, warning that once transaction validity depends on judgments about acceptable use, future disputes over privacy tools or stablecoin settlement could face similar restrictions. He called the proposal a “Bitcoin Iatrogenic Proposal” that creates more risk than the problem it targets.

Community reaction on X shows a divided response. Among sampled replies, an estimated 60-70% pushed back against Saylor, while 20-30% backed his position on preserving neutrality. Supporters of BIP 110 argue it responds to rising node costs and data storage use cases outside plain payments. Saylor’s post drew more than 1,500 likes and over 320 reposts, outpacing the more critical tone in direct replies.

Source: https://news.bitcoin.com/saylor-rejects-bip-110-warns-softfork-threatens-bitcoins-neutral-rules/