Bitcoin Proposal to Restrict Non-Financial Data Storage Effectively Fails After Missing Miner Backing

A proposal to restrict non-financial data storage on the Bitcoin network, known as BIP-110, has effectively failed after it did not win broad support across the industry. The dispute has resurfaced a longstanding clash within the Bitcoin community over the cryptocurrency’s purpose and how it should be governed.

CoinDesk reported on July 14 that BIP-110 failed to win backing from the mining industry. Mining companies had little reason to reject transactions carrying competitive fees, while institutional investors were reluctant to enter a governance fight.

BIP-110 was designed to temporarily block the insertion of non-financial data such as images and text into the Bitcoin blockchain. The proposal’s main provision would have tightened consensus rules for about a year, effectively making inscription-based applications such as Ordinals and Runes impossible.

Supporters argued that BIP-110 was an effort to return Bitcoin to its original purpose as peer-to-peer digital cash. Opponents countered that creating a precedent for restricting certain transaction types could open the door to broader censorship. They also cited Bitcoin’s long-standing practice of treating valid transactions equally regardless of purpose.

The proposed activation method also drew criticism. Bitcoin upgrades typically proceed only after overwhelming support emerges across the ecosystem, including from miners, companies and wallet providers. BIP-110 instead adopted a user-activated model in which upgraded nodes would enforce the new rules once preset conditions were met. Opponents argued that approach could split the Bitcoin network, much as the 2017 block-size dispute did.

Strategy founder Michael Saylor wrote on X on July 11 that “BIP-110 turns the spam debate into a consensus change that invalidates some transactions that are currently valid and fee-paying.” He added that “the precedent itself is dangerous. We should conserve our energy for the threats that truly matter.”

Blockstream co-founder and veteran developer Adam Back has also consistently opposed BIP-110.

CoinDesk said the BIP-110 dispute could be remembered as a turning point in the broader debate over Bitcoin’s purpose and the use of block space.