This article is a guest contribution by Brandon Black. The views expressed are solely those of the author and do not necessarily reflect the positions of BTC Inc. or Bitcoin Magazine.
Within the niche community surrounding Bitcoin X (previously known as Bitcoin Twitter or Crypto Twitter), there has been considerable discussion over the past year regarding @dathon_ohm’s proposal for a Reduced Data Temporary Softfork, commonly referred to as BIP110. The foundation of this proposal rests on the assertion that specific Bitcoin transactions are contravening network principles by including locking or unlocking scripts containing data that can be interpreted in multiple ways beyond their straightforward Bitcoin script interpretation. Proponents of BIP110 argue that mitigating the prevalence of such transactions provides sufficient justification for the most restrictive Bitcoin softfork to date, characterized by an expedited deployment timeline compared to the two preceding softforks and a lower activation readiness threshold.
Bitcoin functions as an open-access, censorship-resistant ledger accessible to anyone willing to pay adequate fees to incentivize block template creators and miners to include their transactions. The primary value of Bitcoin, in comparison to other ledger systems, is this open access. Absent this feature, Bitcoin’s ledger would hold no more worth than a scoreboard at a bowling alley. This inherent open-access nature implies that Bitcoin may be utilized by individuals or entities some may find objectionable. Analogous to the principle of free speech—which holds no significance if it pertains solely to favored messages—Bitcoin’s open-access premise would be rendered meaningless if restricted to transactions deemed acceptable by select observers. Therefore, it is reasonable to assume that there is no desire to engage in the surveillance of how others structure their ledger entries, just as one would not wish to have their entries scrutinized by others.
Proponents of BIP110 may contend that this argument pertains only to monetary entries, questioning the treatment of non-monetary transactions. However, the truth is that there is no definitive distinction between the two. Every Bitcoin transaction is executed by satisfying the conditions of a specific locking script, consuming input coins, and generating output coins. The relative size of one transaction’s scripts compared to another is inconsequential for Bitcoin node operators or users. First, node operators typically do not concern themselves with the details of other users’ transactions; they are no more relevant than observing other patrons’ orders at a local café. Second, nodes themselves do not differentiate between transactions; they are either valid or invalid, with varying costs associated with validation depending on the complexity of the transaction.
One could argue that Bitcoin, similar to gold, would serve as a superior monetary asset if it could not be scrutinized from alternative perspectives. One can imagine if gold were exclusively utilized for monetary purposes, eschewing industrial or decorative applications—this might indeed enhance its role as money. Yet the very characteristics that render gold an attractive currency also fuel its desirability in other domains. Likewise, the intrinsic nature of Bitcoin—allowing any individual to make an entry upon paying requisite fees—necessitates the relinquishment of any notion of controlling how entries may be interpreted. Regardless of the constraints imposed on entry structures, it remains feasible to construct entries interpretable in various ways by external software. Consequently, both Bitcoin and gold face the inevitability of multifaceted usage. In the case of gold, this results in market distortions influenced by non-monetary demand fluctuations; for Bitcoin, it can lead to periods of heightened transaction fees due to increased competition for its limited blockspace.
In the Bitcoin ecosystem, two distinct advantages exist that gold does not possess. Firstly, the creation of Bitcoin transactions viewed through alternative lenses does not impact the intrinsic market for Bitcoin itself; unlike gold, minimal Bitcoin is allocated for these alternative uses. Secondly, Bitcoin’s framework is inherently designed to minimize validation costs arising from such diverse interpretations. The protocol imposes limits on both block size and the number of signatures permissible in transactions. These boundaries represent the most significant validation costs to nodes, and their implementation has been a foundational aspect of Bitcoin since its inception, aimed at preventing exploitation through high-frequency or volume ledger usage. Such constraints have already sparked innovations like the Lightning Network, Ark, Spark, Cashu, and more. Even the demand surge for blockspace driven by these “non-monetary” functions has catalyzed the adoption of scaling solutions, which require fewer entries on the primary ledger.
Having examined the rationale behind BIP110, which appears to be fundamentally flawed, it is pertinent to scrutinize the proposed modifications themselves. BIP110 seeks to impose restrictions on the size of locking scripts, limit the number of alternative scripts in Taproot, invalidate the Taproot annex, eliminate all upgradable witness and TapScript versions, and disallow OP_IF and OP_NOTIF in TapScript. All these constraints would apply to UTXOs created within 52,414 blocks (approximately one year) following its activation. Additionally, BIP110 suggests a miner readiness signaling threshold of 55%, contrasting with the 90% or higher thresholds observed in previous miner-signaled softforks. Should 55% of blocks fail to signal readiness before block 961,632, nodes enforcing BIP110 would categorize blocks not signaling readiness as invalid, necessitating the change to lock in by block 963,648 and activate by block 965,664.
BIP110 represents the most comprehensive restriction of Bitcoin script since Satoshi’s notable deactivation of several opcodes in response to a critical vulnerability (CVE-2010-5137) in 2010. It advocates for miner-signaled activation through an unprecedentedly low threshold and enforces node-driven activation within less than nine months from the date the BIP was assigned a number. Such measures stem from concerns regarding the ways certain ledger entries are being interpreted, as per the BIP110 supporters’ perspective. Alarmingly, users engaged in these contested ledger entries have already updated their software to persist in making such entries, irrespective of BIP110’s potential to become Bitcoin’s consensus rule. This outcome was anticipated by many observers, as it is intrinsically infeasible to impose restrictions on how individuals utilize external software to analyze entries on an open-access public ledger.
In summary, BIP110 is a proposal aimed at achieving an unattainable goal—limiting how users interact with an open access ledger—while addressing a concern that is already effectively managed under Bitcoin’s existing protocol constraints. The proposal seeks to implement these ambitious changes on an irresponsibly expedited timeline, with a notable lack of comprehensive code review, and irrespective of whether it garners ecosystem consensus. Fortunately, Bitcoin’s robust architecture is unlikely to be excessively impacted by such misguided attempts at modification. Not only have miners resoundingly rejected BIP110, but various stakeholders—including developers, investors, influencers, and corporate entities—have voiced their opposition to these proposed amendments. By August, this particular challenge to Bitcoin’s consensus framework will have inadvertently strengthened the network, allowing it to continue its steady operational cadence of tick-tock, next block.
Thank you for visiting our site. You can get the latest Information and Editorials on our site regarding bitcoins.
