The 12-year-old Bitcoin scaling debate returns as the BIP-110 proposal reignites division within the community. David Bailey, CEO of Nakamoto, publicly exposed an old conflict to question developer Luke Dashjr’s fitness to guide changes to the cryptocurrency’s code.
The controversy centers on a proposed software upgrade, which seeks a one-year ban on storing images and non-monetary data within the blockchain. July market data indicates that the network’s total valuation hovered around $1.3 trillion, and critics say the stability of a financial infrastructure of such magnitude should not depend on the criteria of a single programmer.
Bailey alleges that in 2014, Dashjr secretly added bitcoin address blacklisting to the Gentoo repository he maintained, effectively blocking payments by default to certain platforms such as gambling sites. Reports from the time indicate that other Bitcoin Core contributors noted that such restrictions should be implemented in separately named versions rather than in the default software. Dashjr’s defenders say he reversed the original setting, issued a public apology, and made the feature an optional alternative for users.
Tension surrounding the BIP-110 proposal has increased due to the lack of consensus among key participants in the cryptocurrency ecosystem. Technical reports indicate that miner backing for this measure has remained below 0.79% of processing power since December 2025.
Computers running the Bitcoin Knots software variant plan to reject transaction blocks that do not explicitly flag adherence to the change starting in early August 2026. Prominent figures have warned that insistence on this mechanism could lead to a network fork, leaving supporters isolated on a minority chain with no relevant commercial value.
Governance documentation indicates that the formal activation window is projected for the early days of August, but the lack of broad economic alignment differentiates this upgrade from historically successful efforts such as SegWit in 2017. Analysts warn that the current dynamics could hinder coordination and lead to fragmentation rather than a unified upgrade.
Adam Back, CEO of Blockstream, warned that insistence on this mechanism could lead to a network fork, isolating supporters on a minority chain with no relevant commercial value.
Michael Saylor, founder of MicroStrategy, labeled the initiative a self-inflicted risk to the consensus protocol.
