Stephan Livera: What Everyone Gets Wrong About BIP-110

— BIP-110 (Reduced Data Temporary Soft Fork) is a proposed consensus change being pushed by a minority faction to impose stricter transaction filtering, primarily targeting ordinal inscriptions and data embedding. The pro-110 side argues it combats spam; the anti-110 side contends it doesn't meaningfully reduce spam and sets dangerous precedents.

— OP_RETURN size increase from 83 bytes to 100 KB in Bitcoin Core v30 is a policy default change, not a consensus rule. Prior to this change, inscriptions of up to 400 KB already existed in the witness space due to the 4X discount. Proponents misrepresent this as opening a floodgate when workarounds were already in place.

— Spam in Bitcoin can be embedded in multiple transaction locations: OP_RETURN (outputs, safest for pruning), witness data (inscriptions, used by ordinals), and fake pubkeys (worst for UTXO set). Banning one opcode does not stop spammers; they simply switch methods. This is the core technical disconnect in the debate.

— Network consensus on BIP-110 is minimal: ~0.3–0.8% of mining hash rate, ~6–15% of nodes (versus 85% running standard Core). No major businesses support it. This contrasts sharply with 2017's block size war, which involved well-capitalized stakeholders on both sides.

— The mandatory signaling period arriving around August 8–9 will likely cause the BIP-110 chain to stall, as miners representing 99% of hash rate will continue the main chain. A split would only occur if Luke Dasher implements an emergency difficulty adjustment, creating an altcoin.

— Tribal and social dynamics have driven infighting; many supporters were misled about what filtering can achieve. The anti-110 camp emphasizes that Bitcoin is already money and needs no virtue-signal consensus changes that risk genuine monetary use of Bitcoin scripting.

— Do not chase consensus drama or social media narratives. The technical and economic weight of the network (mining pools, exchanges, custodians) strongly opposes BIP-110. A chain split remains extremely unlikely; the most probable outcome is the proposal dies at mandatory signaling in early August.

— Understand the difference between policy defaults and consensus rules. Changes to OP_RETURN size or node relay policies do not alter what Bitcoin accepts as valid; spammers already had workarounds. Filtering at the consensus layer risks breaking legitimate uses and sets a harmful precedent for future soft forks.

— Focus on long-term Bitcoin adoption over ideological purity. Growth requires a "big tent" approach—self-custody advocates, treasury companies, ETF holders, and layer-2 builders all serve to expand Bitcoin's user base and economic security. Use cost-basis averaging on a 10–20 year horizon rather than attempting to catch local bottoms.