BIP-110 Debate: When Bitcoin Core Lost Ground from 98% to 77.2%

Deep debates are erupting within the Bitcoin community as users shift to alternative client versions. Bitcoin Core— the key node software of the Bitcoin network— has experienced a significant decline, dropping from 98% market share to 77.2%, while Bitcoin Knots has surged to 22.7%. This shift reflects deep disagreements over Bitcoin’s technical development direction, especially concerning non-financial transactions like Ordinals and Runes.

Key Differences: Data Limitation Campaign and Reactions from Blockstream Leadership

The central figure in this controversy is Adam Back, head of Blockstream, who publicly opposed a proposal called BIP-110. Introduced recently by a developer using the pseudonym Dathon Ohm, BIP-110 aims to temporarily limit the amount of data that can be stored in Bitcoin transactions. The goal is to prevent an influx of images, videos, and unrelated content on the blockchain.

Back voiced his opinion on X, stating that BIP-110 represents “an attack” on Bitcoin’s reputation as a secure and reliable monetary network. In his view, increasing on-chain data is merely a “nuisance” and not a genuine security threat to the system.

BIP-110 was designed as a temporary measure, with an evaluation period of 12 months. However, this proposal gained support from nearly 7.5% of Bitcoin nodes, especially those running Bitcoin Knots. Support increased after Bitcoin Core decided to remove the 80-byte limit on the OP_RETURN feature by the end of 2025, allowing more non-financial activities to take place on the blockchain.

Fundamental Disagreement: Diverging Visions for Bitcoin’s Future

Opponents of removing the 80-byte limit, including Adam Back, argue that spam transactions have no “legitimate place on the public ledger.” They also warn that BIP-110 could freeze some UTXOs (unspent transaction outputs), making certain funds unusable.

However, Dathon Ohm— the proposer of BIP-110— acknowledges these risks but emphasizes that the plan has been carefully designed to avoid harming any known legitimate use cases.

The Ordinals Debate: Economic Contribution vs. External Features

Proponents of non-financial transactions, led by Leonidas— head of the Ordinals ecosystem— highlight the economic contributions of Ordinals and Runes. They claim these ecosystems have injected over $500 million in transaction fees, significantly boosting Bitcoin’s security, especially as mining subsidies decline.

However, real data from Dune Analytics tells a different story. Recently, fees from Ordinals inscription have generated less than $10,000 per day for miners. This starkly contrasts with the “golden days” of Ordinals—over two years ago, on December 16, 2023, miners earned nearly $10 million in a single day from inscription fees. Since that peak, Ordinals activity has generally declined, with only occasional spikes.

The Bigger Picture: Community Divisions and an Uncertain Future

The shift from Bitcoin Core to Bitcoin Knots—from 98% to 77.2%—reflects deeper divisions within the Bitcoin community regarding on-chain data, the role of non-financial transactions, and the network’s long-term development. BIP-110 and the surrounding debate are not just technical disputes but also fundamental questions about the nature and mission of Bitcoin.