BIP-110, a Bitcoin Improvement Proposal that would restrict arbitrary data in transactions, is heading toward a mandatory signaling period. But with miner support below 1% and most senior developers opposed or indifferent, the proposal's path is uncertain.
Limiting the bloat
BIP-110, formally titled 'Reduced Data Temporary Softfork,' aims to limit arbitrary data in Bitcoin transactions by restricting scripting capabilities. The idea is to reduce blockchain bloat from non-financial data like text or images embedded in transactions. Supporters argue this keeps Bitcoin focused on its core function: transferring value.
Who's behind it
The proposal is led by pseudonymous developer Dathon Ohm and backed by the Knots community. Knots is an alternative Bitcoin implementation led by Luke Dashjr, an early Bitcoin Core contributor. The Knots community has been pushing for tighter data limits for years, and BIP-110 is their latest attempt to force the change through a soft fork.
The miner math problem
As of this week, miner signaling for BIP-110 sits at less than 1%. That's a problem, because the proposal needs significant miner support to activate. Most senior Bitcoin developers are either opposed or apathetic to the changes. Supporters of BIP-110 believe that by running Bitcoin full nodes that signal for the consensus change, they alone can change Bitcoin. But that belief rests on a misunderstanding of what a Bitcoin node is and its power.
A Bitcoin node is a full copy of the blockchain's transaction history, block headers, and related data. It verifies the integrity of Bitcoin's supply and transaction history against consensus rules. Nodes grant users privacy by letting them check balances without sharing public addresses with third-party wallet companies. They also let users check whether they're in consensus with the rest of the network. But a node alone doesn't dictate the rules — it can only enforce them. If a user mines Bitcoin, the node can assemble a block, but that requires significant hashing power due to difficulty and competition. Even decentralized mining pools like Ocean need enough hashing power to win the proof-of-work race, resulting in limited influence over the blockchain.
The proposal is heading toward a mandatory signaling period, which could trigger a fork with Bitcoin Core if it gains enough support. But with current signaling at less than 1%, that scenario looks unlikely. The next concrete milestone is the start of the signaling period, expected in the coming weeks. Whether the Knots community can rally more miners before then remains an open question.
