Bitcoin’s Governance War: Why Michael Saylor Wrote 110 Reasons Against BIP-110

A soft-fork fight over who gets to define Bitcoin is entering its final stage before the August 7 activation window. Michael Saylor has put himself at the front of the opposition with a 110-point manifesto.

1. Why this dispute is worth examining

The immediate reason for writing this article is simple: Chinese-language crypto media have mostly translated BIP-110 news alerts, without offering an in-depth builder’s analysis.

I have followed the debate on X for two weeks. Michael Saylor’s 110-point document opposing the proposal received 830,000 views and thousands of reposts in the English-speaking world. Longtime Bitcoin figures including Adam Back, Luke Dashjr, Peter Todd, and Jameson Lopp all weighed in. Chinese outlets such as Odaily, PANews, and ChainCatcher published scattered reports, mostly about “OG opposition” and “miner voting.” No one had fully explained the technical details, the shift in governance, and the economic arithmetic behind the fight.

While the market chases the next altcoin narrative, Bitcoin itself is going through its most serious governance crisis since the 2017 SegWit block-size war.

Building Hyperloop Finance, a non-liquidating lending protocol that uses BTC as its main collateral and draws on the OTC options market, has convinced me of one thing: anyone whose business thesis depends on Bitcoin’s long-term value must understand the politics of consensus. Every change to consensus rules helps redefine what BTC will be over the next decade. What BTC is determines the foundation on which businesses around it are built.

BIP-110 sits exactly at that intersection.

2. What exactly is BIP-110?

First, the technical facts.

BIP-110, formally titled “Reduced Data Temporary Softfork,” proposes a temporary soft fork lasting roughly 12 months. It was first published as BIP-444 in October 2025, soon after Bitcoin Core v30 removed the OP_RETURN data-size limit. Its author uses the pseudonym Dathon Ohm; its most active public advocate is Luke Dashjr, CTO of the Ocean mining pool.

It bundles seven technical restrictions:

Restore the OP_RETURN limit to 83 bytes.
Limit most push data and witness items to 256 bytes.
Reject undefined witness and Tapleaf versions.
Disable the Taproot annex field completely.
Cap Taproot control blocks at 257 bytes.
Reject certain Tapscript operations and branches.
Run for roughly one year, while grandfathering UTXOs created before activation.

In plain English, the restrictions would eliminate Ordinals, Inscriptions, and Bitcoin protocols that depend on large data fields.

Supporters frame this as removing junk data from the chain. Opponents ask: who gave anyone the authority to define junk?

Luke Dashjr is one of Bitcoin’s longest-serving and most aggressive data purists. Behind him is the Bitcoin Knots camp, which argues that Bitcoin should serve monetary functions alone and reject non-monetary data. The proposal’s real-time signaling monitor is available at bip110.org.

The decisive detail is the activation mechanism: BIP-110 uses a 55% miner-signaling threshold. Historical Bitcoin soft forks have generally required 95% under BIP 9, or 90% for Taproot’s Speedy Trial. At 55%, the rules could change even if almost half the hash rate objected.

3. The timeline

October 2025: BIP-444 first published.
July 11, 2026: Adam Back publicly opposes it.
July 15, 2026: Saylor posts “BIP 110: Bitcoin Iatrogenic Proposal.”
July 18, 2026: Saylor publishes 110 Reasons BIP 110 Is a Bad Idea.
Around August 7, 2026: signaling opens at block 961,632.
Around September 1, 2026: enforcement begins if the 55% threshold is met.

At the time of writing, the signaling window was just over two weeks away. Miner support stood at 1.14% and had never exceeded 2%.

Numerically, activation looked almost impossible. But that was not the point.

4. Saylor’s 110-point counterattack

Saylor’s rhetorical move was clever: he answered BIP-110 with 110 reasons to reject it, one for every number in the proposal, and recast BIP as Bitcoin Iatrogenic Proposal. It was a piece of public-relations engineering.

More important was the document’s architecture. It was not a list of random complaints, but a cumulative case built on 11 argumentative axes, ten points each.

4.1 The 11 axes

#	Axis	Core argument
I	Neutrality and first principles (1–10)	What consensus should never do
II	The burden of proof is unmet (11–20)	The quantitative work BIP-110 omits
III	The technical scope is too broad (21–30)	Seven restrictions improperly bundled into one vote
IV	Compatibility and future options are sacrificed (31–40)	Several upgrade paths closed at once
V	Temporary consensus rules create permanent complexity (41–50)	“Temporary” changes leave lasting traces
VI	Economic and security effects are unknown (51–60)	No model of fees or the security budget
VII	Better market and policy tools already exist (61–70)	Relay and mining policy are the proper layer
VIII	Innovation and adoption are suppressed (71–80)	Chilling effects on BitVM and Layer 2
IX	Activation is too aggressive (81–90)	55% versus the historical 95% threshold
X	The precedent is more dangerous than the target (91–100)	Once opened, this door will not close
XI	A better path exists (101–110)	What responsible action would look like

Each axis can stand alone, but together they form the complete attack. This is an engineered manifesto, not an emotional outburst.

4.2 Its sharpest lines

“Bitcoin cannot read intent.” (Axis I, #4)

“‘Spam’ is not a consensus primitive.” (Axis II, #11)

“The proposed cure is more dangerous than the condition.” (#110)

“Bitcoin does not need guardians of purity. It needs guardians of neutrality.” (Conclusion)

The strongest ideological judgment was this:

“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.”

Within the Bitcoin community, “statist” is one of the heaviest accusations available. It says that, in spirit, the proposal resembles the central authority Bitcoin was built to resist.

4.3 The backbone: precedent

Saylor’s real concern was not that this attempt would pass; its 0.86% signaling rate made failure nearly certain. His concern was that once consensus rules begin deciding legitimacy according to content, that door cannot be closed.

Axis X dedicates ten points to precedent. Two are especially direct:

#91: Rules expire. Precedents do not.
#94: Use-based boundaries decay into political boundaries, turning protocol debates into contests over values and power.

Every future “we do not like this” could become justification for another soft fork. The full 110-point case is available in Saylor’s original post.

5. What does the supporting side argue?

The supporters’ case deserves serious treatment.

Luke Dashjr’s camp makes three central claims:

Block space is scarce. Ordinals and Inscriptions displace monetary transactions.
Bitcoin was designed as a monetary system. Putting NFTs, images, and text on-chain violates Satoshi’s intent.
Storage and verification costs will keep rising. Redundant on-chain data will centralize node operation.

Supporters also offer a quantitative claim: simulations using historical data suggest that BIP-110 would filter 41.5% of “spam” transactions, recover 36% of block space, and block no legitimate financial transaction. Fred Krueger published a mirrored 110 Reasons FOR BIP-110, rebutting Saylor point by point.

At the mining layer, the most interesting move came from Foundry USA, then the largest pool at roughly 33% of global hash rate. It launched a hash-weighted vote so its mining customers could decide whether to support BIP-110. This was not passive signaling but an organized decision process. F2Pool co-founder Wang Chun, Jameson Lopp, and Adam Back publicly joined the opposition.

The real front line is not whether to clean data, but Bitcoin’s ontology:

One camp sees Bitcoin as digital gold plus a global value-settlement network. The chain should carry monetary functions; everything else is overhead.
The other sees Bitcoin as neutral, censorship-resistant public infrastructure available for any lawful use that pays the fee: images, attestations, contracts, identity, or anything else.

This is a clash between two worldviews, not merely a technical disagreement.

6. The overlooked economics: BIP-110 and Bitcoin’s security budget

The least discussed dimension may be the most important to Bitcoin’s survival: the relationship between transaction fees and the security budget.

Miners protect Bitcoin because doing so produces revenue from two sources: the block subsidy plus transaction fees. The subsidy follows a curve toward zero:

2009: 50 BTC per block.
After the April 2024 halving: 3.125 BTC.
After the next halving in 2028: 1.5625 BTC.
Around 2140: zero.

In the long run, fees must replace the subsidy. That is an explicit assumption in Satoshi’s design and one of the central unresolved questions in Bitcoin economics.

How much is enough? In Bitcoin: Fee-Based Security Modeling, Lyn Alden proposed a long-term annual security budget of 0.5%–1.5% of market capitalization, measured as total miner revenue divided by market cap. She treats 0.5% as the level at which concern should begin. Bitcoin measured roughly 2.5% in 2020 and 2.0% in early 2021, comfortably above that range, but the block subsidy was still 6.25 BTC. It is now 3.125 and will fall to 1.5625 in 2028. Without materially higher fees, the 0.5% warning line is foreseeable.

The fee reality was already weak:

March 2025: fees were only 1.25% of miner revenue, a three-year low.
2023: Ordinals and Inscriptions supplied 21% of annual fees, according to Messari.
Cumulative: Inscriptions accounted for roughly 22% of miner revenue since launch.
BRC-20 alone: more than 5,000 BTC in fees, according to BitMEX estimates.
Halving block 840,000: 37.6 BTC in fees, driven by the launch of Runes.

The uses BIP-110 seeks to remove as “junk” were among the only sources of meaningful new fee demand during the previous two years.

Even if the restrictions lasted only a year, BIP-110 would deliberately cut more than 20% of existing fee revenue when the post-halving fee share was already just 1.25%. That is not an abstract philosophical disagreement. It is a quantifiable hit to the security budget.

Saylor raised the point: BIP-110 did not model how suppressing one class of transactions would affect fee demand, miner incentives, and long-term network security. Yet most public debate stayed at the level of philosophy and neutrality.

To me, this is the supporters’ largest blind spot. If Bitcoin is digital gold and global settlement, its long-term security budget should matter most to them. Removing the few uses generating fees moves Bitcoin closer to a security cliff after the next halving.

This is not ideology. It is arithmetic.

7. Why I care as the founder of a BTC lending protocol

The BTC lending protocol I am building does not run on Bitcoin’s base layer. It runs on the EVM, while options attestations use off-chain feeds from Deribit and Derive. I do not directly use the Taproot annex, complex Tapscript, or large witness data targeted by BIP-110.

I still care about BIP-110. My business thesis assumes that BTC survives over the long term and remains the world’s most trusted collateral. The proposal exposes questions about security budgets, governance, and positioning that determine whether that assumption holds.

I draw three conclusions.

First, BIP-110 will probably fail, but proposals like it will return.

A 0.86% signaling rate cannot activate it, and Saylor successfully turned an internal developer dispute into a public debate. But Luke Dashjr’s camp will not disappear. Every new wave of Ordinals, NFTs, or Bitcoin protocols will provoke the same reaction. For builders betting on BTC’s long-term value, this recurring tension is a political variable that must be tracked.

Second, Saylor’s intervention is a structural turn in Bitcoin governance.

Before BIP-110, Saylor’s public image was largely that of an evangelist for ever-rising BTC. Here, he entered as a core governance participant: writing a 110-point document, invoking Austrian economics, and directly confronting Luke Dashjr. Large holders had formally entered the governance contest.

Bitcoin’s historical governance triangle consisted of miners, developers, and node operators. Saylor effectively introduced a fourth party: whales and institutional holders. Whether Bitcoin is steered by a minority of technical purists or a broader set of economic stakeholders leads to two very different long-term stories.

Third, BIP-110 exposes a consistency problem inside Bitcoin’s own narrative.

If Bitcoin is only digital gold, Dashjr’s position is coherent: the chain does not need non-monetary data. If Bitcoin is general, censorship-resistant public infrastructure, Saylor’s position is coherent: every fee-paying use is legitimate.

Both stories eventually need fees to replace the subsidy, and Ordinals, Inscriptions, and Runes are already meaningful fee sources. BIP-110 seeks to remove them without answering where replacement fees come from.

This need not be a dead end. A higher BTC price, more monetary use, and Layer 2 settlement may all contribute. But supporters need a model rather than leaving the question to the future.

8. Conclusion: what this debate is really about

BIP-110 will fail. That is almost certain.

But the questions it exposed will last: Who should decide Bitcoin’s rules? Miners, developers, nodes, or whales? By what standard, and at what threshold?

Saylor ended with a line I strongly agree with:

“Bitcoin does not need guardians of purity. It needs guardians of neutrality.”

Bitcoin’s value has never been purity, but neutrality. No one should be able to restrict another person’s legitimate use through a consensus change merely because they dislike the content.

Once that principle erodes, Bitcoin ceases to be the final protector of digital property rights and becomes an enforcement tool for the tastes of a minority.

That is what is truly at stake.

References

Troy Yan is the founder of Hyperloop Finance, which is building a non-liquidating lending protocol around Bitcoin and the OTC options market.