Nakamoto founder Bailey hails BIP-110 failure as bullish for Bitcoin

David Bailey, the founder of Nakamoto, said yesterday that the BIP-110 proposal will not be moving forward anymore, just weeks before it was set to go live.

He made the announcement on X, where he called the failed soft fork “incredibly bullish for Bitcoin” and described the campaign behind its cancellation as a “hostile takeover attempt.”

What is BIP-110?

BIP-110, also known as the Reduced Data Temporary Softfork (BIP-444), was introduced in December 2025 by developer Dathon Ohm. The proposal was introduced to cut down on unnecessary data being added to Bitcoin transactions, which some say distorts the way the network is used and could threaten Bitcoin’s role as a form of money.

To address these concerns, BIP-110 proposed strict new limits on transaction data. For example, new outputs would be capped at 34 bytes, certain types of data would be limited to 83 bytes, and other technical restrictions would be implemented. The new rules were designed to last only one year, with older coins unaffected.

Why was it canceled?

Despite being discussed for months, the proposal never really gained enough support. By February, less than 10% of Bitcoin nodes were in favor, and none of the top 20 mining pools joined in. 

Bailey, the Nakamoto founder, insisted this wasn’t due to apathy but rather a strong rejection of BIP-110’s core ideas. He described the debate as “information warfare” and accused some developers of trying to hijack the network.

Other experts also shared their concerns. BitMEX Research warned Bailey that the changes could break wallets, disrupt popular tools, and even result in people losing funds. 

Others pointed out that limiting data might not stop spam or malicious transactions, and that it could split the Bitcoin network into competing versions, creating rival coins like Bitcoin Cash and Bitcoin SV.

A community divided

The debate over data in Bitcoin is not new. Some believe that too much data clutters the network and makes it harder for individuals to run Bitcoin nodes (which are necessary for security and decentralization). 

Others, like Martin Habovštiak, have shown that even with the new limits, it’s still possible to store large files on the blockchain, after he famously uploaded a 66-kilobyte image on the blockchain as proof.

The controversy grew even more last year when an October software update removed long-standing data limits, prompting some users to switch to an alternative called Bitcoin Knots. As of February, Knots made up nearly a quarter of all Bitcoin nodes.

What now?

While the threat of a network split or broken wallets has reduced for now, the arguments over BIP-110 still rage on. Some are worried that Bitcoin could face more pressure from regulators or see its transaction fees rise due to data-heavy features such as “ordinals” and “runes,” which now make up more than 67% of network transactions.

There’s also a chance that a small group of node operators and miners could try to activate BIP-110 on their own, creating two parallel versions of Bitcoin: one with stricter data rules and one without.

For the moment, though, the Bitcoin community is breathing a sigh of relief as the risk of a disruptive split has faded, at least until the next proposal comes along.