BIP-110 Splits Bitcoin Community as Miners Vote on Reduced Data Proposal

The community is again debating the future of the network. At the center of the discussion is BIP-110, also known as the Reduced Data Temporary Softfork, a proposal that would temporarily limit certain types of non-payment data in Bitcoin blocks.

What BIP-110 Proposes and Why It Matters

BIP-110 proposes a one-year change to Bitcoin’s consensus rules. Its listed author is Dathon Ohm. The idea is to temporarily limit the size of certain data fields, making it harder to use the Bitcoin blockchain for arbitrary records and shifting more attention back to the network’s monetary function.

Technically, the proposal would add several block-level restrictions. It would block the creation of new scriptPubKey outputs larger than 34 bytes, except for OP_RETURN outputs of up to 83 bytes. It would also limit OP_PUSHDATA, witness elements larger than 256 bytes, and certain Taproot and tapscript constructions. UTXOs created before activation would be exempt, so existing coins could still be spent even if their scripts do not meet the new rules.

In plain terms, BIP-110 is meant to reduce the use of Bitcoin for large data entries that are not directly tied to BTC transfers. That would affect Ordinals, inscriptions, Runes, and similar protocols that add images, text, or token-related data to Bitcoin.

How Miner Signaling Works

The proposal uses miner signaling as part of its activation design. Miners would indicate support by setting a specific bit in the block version, and early lock-in would require 55% of blocks in one 2,016-block difficulty period to signal for the change. Traditionally, a 95% threshold has been used for Bitcoin soft-fork activations.