Bitcoin faces debate over BIP-110 proposal to restrict on‑chain data

Bitcoin Improvement Proposal 110 (BIP-110) seeks to limit the amount of arbitrary data—such as Ordinals, Runes and other non‑monetary inscriptions—that can be stored in Bitcoin transactions. The change would tighten rules on the OP_RETURN field and other data‑carrying mechanisms that have become popular for embedding images, NFTs and tokens on the blockchain.

The proposal requires a majority of mining pools to signal support before early August 2026 for activation. Signaling so far remains low, with major miners largely on the sidelines. Blockstream CEO Adam Back has dismissed fears that a lack of support would trigger an automatic chain split, saying the signaling process will simply expire if insufficient backing is received. Critics argue the proposal could set a precedent for censorship and threaten Bitcoin’s neutrality, while supporters view it as a way to preserve block space and network efficiency. The debate continues as the signaling window approaches, and the outcome will shape how Bitcoin handles non‑financial data in the future.