Michael Saylor, the man who turned his company into a Bitcoin treasury, just threw a grenade at a proposal he believes could poison the network. His target: BIP-110. The proposal is simple—reduce the block space available for non-monetary data like Ordinals inscriptions. But Saylor’s objection is not technical. It is existential. He argues that filtering transactions at the protocol level sets a precedent for censorship, eroding the very neutrality that gives Bitcoin its monetary premium. This is not a debate about code. It is a debate about identity.
I have spent the last four years studying how liquidity flows through crypto markets—both real and illusory. My work on CBDC pilot programs in Southeast Asia taught me one thing: trust is the scarcest resource. Bitcoin’s value derives from its promise of predictable, rules-based settlement. Any deviation from that promise, even one dressed up as a “temporary soft fork,” degrades the asset’s core value proposition. Saylor understands this. His public opposition is not a whim; it is a calculated defense of the narrative that supports his $15 billion position.
Let us examine the context. BIP-110, officially the “Reduced Data Temporary Softfork,” proposes to soften the Bitcoin network’s rules by lowering the activation threshold for soft forks from the traditional 95% to just 55%. The explicit goal is to limit transactions that contain large amounts of non-financial data—specifically, the inscriptions that fuel Ordinals and BRC-20 tokens. The proposal’s authors argue that such data bloats the blockchain, drives up fees, and distracts from Bitcoin’s primary use case as a peer-to-peer electronic cash system. They have a point. In 2023 and early 2024, Ordinals-related activity accounted for a significant portion of transaction fees, sometimes exceeding 50% of total fee revenue. But this is not a technical problem. It is a philosophical one.
The core insight here is that BIP-110 is not about scalability or security. It is about governance. By lowering the activation threshold to 55%, the proposal changes the power dynamics of Bitcoin’s consensus process. Historically, Bitcoin upgrades require near-unanimity to avoid splitting the network. The 95% threshold ensures that a proposal has overwhelming support before it activates. A 55% threshold means a simple majority of miners—potentially a single large pool or a coalition of small pools—could force a change that the rest of the ecosystem rejects. This is a slippery slope, and Saylor is right to fear it. Liquidity is a mirage; only settlement is real. If the rules of settlement can be altered by a narrow majority, the settlement itself becomes a political construct, not an immutable truth.
But the contrarian angle here is that Saylor’s opposition may actually strengthen Bitcoin’s long-term narrative. The debate itself forces the community to articulate why neutrality matters. Consider this: if BIP-110 were to pass, the immediate impact would be the death of Ordinals and the migration of data-heavy applications to Layer 2s or sidechains. The Bitcoin main chain would become more “pure,” a pristine monetary layer. For holders like Saylor, that outcome is ideal—less noise, less controversy, lower risk of regulatory attention. However, the mechanism by which this purity is achieved—a lower barrier for protocol change—introduces an even greater risk: the precedent for future censorship. Once the network starts filtering transactions based on content, it becomes a tool of policy, not a neutral platform. Trust is the new collateral. And trust in a network that can be altered by a 55% miner vote is fragile.
Based on my experience auditing liquidity pools during the 2019 bear market, I learned that most participants focus on short-term fee revenue while ignoring structural fragility. Miners today earn substantial fees from Ordinals. If BIP-110 passes, they lose that income. But their long-term survival depends on the network’s credibility. A Bitcoin that is seen as censorship-prone will lose its premium over other stores of value. The wise miner—the one who thinks in decades, not halving cycles—should oppose BIP-110. But miners are not a monolith. Some may see the proposal as a way to reduce transaction volume and lower their operational complexity. Others may welcome the chance to increase their influence in governance.
The regulatory angle amplifies the stakes. In my research on CBDC frameworks, I observed that central banks assess digital assets partly on the degree of decentralization and neutrality. A Bitcoin that actively filters transactions could be classified as a “managed” network, potentially subject to securities laws. Saylor, as the CEO of a publicly traded company, cannot afford that risk. His opposition is as much about legal liability as it is about ideology. Speed is not security. A faster, cleaner blockchain is worthless if its fundamental property rights are questionable.
Let me offer a forward-looking takeaway. The BIP-110 debate will not be resolved by a vote. It will be resolved by the market’s perception of what Bitcoin represents. If the proposal’s supporters succeed in activating it, they will have won a battle but potentially lost the war—the network’s neutrality will be permanently scarred. If the proposal fails, the Ordinals ecosystem will continue to grow, and Bitcoin will remain a permissionless data layer, but the internal conflict will persist. The real question is whether the community can reconcile these two visions without a hard fork. History suggests that civil wars in crypto rarely end cleanly. The Bitcoin Cash split of 2017 taught us that ideology trumps code. We are approaching a similar inflection point.
In my view, the healthiest outcome is for BIP-110 to be abandoned in favor of a more robust governance mechanism—one that preserves the high barrier for change while allowing for incremental adjustments. The 55% threshold is a dangerous precedent, even if the proposal itself has merit. Bitcoin’s strength lies in its conservatism. Hype is a liability. The hype around Ordinals created a problem, but the cure of a soft fork with a low activation threshold might be worse than the disease.
As a macro watcher, I see this as a test of Bitcoin’s ability to absorb internal shocks without fracturing. The market is barely pricing in this risk. ETF flows have been positive, sentiment is bullish, and most traders are focused on the next Fed decision. But beneath the surface, a quiet war is being fought over the soul of the network. The winner will define the trajectory of digital gold for the next decade. Saylor has drawn his line. The rest of the ecosystem must now choose sides.
I will be watching the miner signaling data, the developer mailing list, and the discourse on social platforms. The first miner to publicly signal support for BIP-110 will trigger a cascade of reactions. If a major pool like AntPool or F2Pool announces support, the probability of activation jumps from low to medium. Conversely, if Saylor’s stance convinces other large holders to speak out, the proposal may die quietly. Either way, the debate itself has already changed Bitcoin forever. It is no longer a static technology. It is a living constitution, being amended in real time.
Illusions fade. Ledgers remain. The ledger is the ultimate judge. But the rules that govern what goes into the ledger are now up for debate. That is the story of Bitcoin in 2025.