On July 19, 2025, Michael Saylor, founder of MicroStrategy and the largest public corporate holder of Bitcoin, dropped a 110-point manifesto titled ‘110 Reasons BIP 110 Is a Bad Idea.’ The target: a Bitcoin Improvement Proposal rumored to restrict arbitrary data storage on the base layer — the technical foundation of the Ordinals and Runes ecosystem.
Saylor is not a core developer. He is not a miner. But his public opposition, disseminated through his vast network and financial leverage, effectively halts the momentum of a proposal that, until that morning, had been quietly gaining traction. This is not a spat between maximalists. It is a defining moment in Bitcoin’s governance model — a test of whether the network remains a neutral settlement layer or becomes a platform that curates its own content.
Context: The BIP That Wasn’t Named
The proposal, referred to internally as BIP 110 (a placeholder, not yet assigned an official number), seeks to modify Bitcoin’s consensus rules to limit the amount and type of data that can be embedded in transactions. Current Bitcoin blocks allow OP_RETURN outputs up to 80 bytes, but inscriptions circumvent this by storing data in the witness section of SegWit transactions — a technical loophole that enables arbitrary data to be permanently etched onto the blockchain.
The debate over inscriptions has been simmering for years. Core developer Luke Dashjr has publicly called them a spam attack on the network. Others, including the creators of Ordinals, argue that data storage is a legitimate use of block space. The community has never reached a consensus. BIP 110 was an attempt to break the impasse by explicitly forbidding non-financial data at the protocol level.
Core: A Forensic Analysis of Saylor’s Argument
Ledgers don’t lie. Saylor’s central thesis — that modifying consensus rules to restrict certain transaction types is a dangerous precedent — is supported by a clear reading of Bitcoin’s security model. The network, by design, is a neutral executor of valid transactions. A transaction is valid if it follows the rules: inputs equal outputs, signatures are correct, no double-spend. The protocol does not judge the purpose of the data. It verifies integrity.
From my own experience auditing smart contracts in 2017, I learned that the most catastrophic failures occur when a protocol layer attempts to enforce application-layer policies. The EtherFund incident I uncovered — a reentrancy vulnerability in their donation handler — was rooted in a design that tried to batch-check user intentions. The fix was not to change the consensus, but to isolate the logic. Saylor is making the same point: Bitcoin cannot and should not distinguish between a payment and a piece of artwork. To do so is to introduce a human gatekeeper into an otherwise deterministic system.
The proposed change would effectively empower a small group of developers to decide what data is “valuable” enough to be stored. This is not a trivial shift. It introduces a new attack surface: political manipulation of the transaction inclusion rules. Miners, who currently earn substantial fees from inscriptions, would see their revenue streams slashed. The fee market data from July shows that inscriptions contributed approximately 12% of total transaction fees over the past month. A ban would reallocate that revenue to applications built on Layer2, away from the base layer.
But the deeper issue is the precedent. If Bitcoin can ban data today, it can ban transactions tomorrow. The line between “spam” and “innovation” is subjective. Saylor correctly identifies this. In his 110th reason, he writes: “Bitcoin doesn’t need pure guardians. It needs neutral guardians.” That is not a soundbite. It is an architectural principle.
Contrarian: The Hidden Cost of Neutrality
While Saylor’s stance appears to protect Bitcoin’s neutrality, it may inadvertently accelerate its ossification. The very conservatism that keeps the protocol stable also prevents it from adapting to legitimate scaling needs. Consider the growth of Layer2 solutions: Stacks, RSK, and the emerging BitVM ecosystem require a base layer that can tolerate moderate data availability. If Bitcoin becomes so rigid that even a soft fork to clarify data limits is politically impossible, the entire Layer2 roadmap is at risk.
The irony is that Saylor’s opposition, rooted in a desire to protect the network’s neutrality, may push developers to more flexible chains like Solana or Sui. I have seen this pattern before. In 2020, during the DeFi Summer, I analyzed Compound Finance’s governance model and warned that excessive centralization of voting power would lead to fork-based dissent. The same dynamic is at play here: a small group of influential holders (Saylor, MicroStrategy, a few miners) effectively wield veto power over protocol changes. That is not decentralized governance. It is plutocracy dressed up as consensus.
Furthermore, the assumption that inscriptions are purely “spam” ignores their role in bootstrapping Bitcoin’s NFT and token ecosystem. The Runes protocol, which launched in early 2025, has seen over $800 million in trading volume. A ban would not eliminate the demand — it would simply force it onto other chains, draining value from Bitcoin’s network effects.
Takeaway: The Next Watch
BIP 110 is unlikely to pass now. But the underlying conflict will not disappear. The real question is not whether Bitcoin can remain neutral — it is whether a governance structure that allows a single individual to effectively veto a technical proposal is sustainable.
Keep an eye on the Bitcoin Core GitHub repository. If any pull requests appear that modify the witness data limits, the battle will re-ignite. Also monitor miner signaling: a shift toward support for the proposal would indicate that the fee income from inscriptions is no longer enough to buy their loyalty.
For now, Saylor has drawn a line. But as I learned during the Terra collapse in 2022, lines in the sand can be erased by the tide of data. Ledgers don’t lie, but they also don’t govern. That is a human problem, and it is far from solved.