Adam Back warns of innovation damage as BIP-110 invites regulatory pressure

Blockstream founder and CEO Adam Back is not pulling any punches in his latest criticism of the ulterior motives of those backing the BIP-110 soft fork to address spam on the Bitcoin network, dismissing the proposal as “dead on arrival.”

The latest by Back started with a reshare of a post by the Billy the Bitcoin Mascot account, criticizing the flaws of the logic being peddled by what they consider a fringe group that wants to “clean up” spam on the Bitcoin network. 

Back is not going for that narrative, insinuating a more sinister ploy to “judge and control which scripts or use cases can be built.”

However, innovation damage is only one aspect of the alarm being raised by Bitcoin stakeholders. 

Why is Adam Back against the BIP-110 proposal to eliminate spam?

Even though Adam Back believes that “reducing spam is desirable,” the censorship implications that the BIP-110 proposal could have on Bitcoin’s future are what rub people like Back, Jameson Lopp, and Peter Todd the wrong way.  

Chief security officer at Casa, Jameson Lopp, who’s also a skeptic of the proposal, warned: “By attempting to filter ‘bad’ data, it actually invites more regulatory pressure – if government authorities believe that Bitcoin can be changed by pressuring a few entities, they will almost certainly try to do so. Neutrality protects the network – selective censorship doesn’t.”

Lopp described the narrative to fight spam as a “slippery slope to centralization and control” that is almost inevitable as more reactionary forks are proposed to “kick out bad actors,” which ends up becoming a “never-ending cat and mouse game.” 

Lopp warned of the very probable scenario where the proposed soft fork could lead to an actual “chain split” as seen in the past with Bitcoin Cash (BCH), Bitcoin Satoshi Vision (BSV), and Bitcoin Classic (BGH), where chains compete to be “the real Bitcoin.” 

There’s also the reputational hit to Bitcoin’s resistance to censorship and influence, as well as the halt to future upgrades, at least for as long as the “temporary” BIP-110 soft fork is active. 

The biggest headache for them, though, is that for all the concessions BIP-110 is pushing for, its “restrictions are bypassable. The innovation damage is not,” especially when it’s for a “spam filter that doesn’t even filter spam.” 

In a demonstration of the inherent deficiencies of the proposal, Martin Habovštiak broadcast a 66 KB contiguous TIFF image of Luke Dashjr, a BIP-110 supporter, crying on the blockchain. 

Bitcoin minimalists face off with liberalists

On one side of the argument, Bitcoin figures like Jameson Lopp are challenging the notion that a group can control acceptable Bitcoin use cases. Burden on node operators or not, they insist that anyone can use the blockchain as long as they can afford to cover the gas fees. 

According to a February blog by Jameson Lopp: “Bitcoin is not simply money, it is programmable money, and that comes with the ability to design use cases some may consider to be non-monetary in nature.”

On the other side of the aisle, Dathon Ohm wrote in his abstract of the “Reduced Data Temporary Softfork” submitted to GitHub that BIP-110 is supposed to “Temporarily limit the size of data fields at the consensus level, in order to correct distorted incentives caused by standardizing support for arbitrary data, and to refocus priorities on improving Bitcoin as money.”

Others, like Bitty, have their own issues with the narrative to “refocus priorities on improving Bitcoin as money,” which they believe would negatively impact Ordinals, Runes, and similar protocols that use data on the Bitcoin network in ways BIP-110 proponents consider spam, since they’re not specifically using Bitcoin as money. 

Runes and Ordinals were both created by the same person (Casey Rodamor) to unlock Bitcoin use cases beyond the transfer and store of value narratives. Bitcoin NFTs were only possible because the Ordinals protocol figured out a way to allow each individual satoshi to be identified and transacted with additional data attached via a process known as inscription.

According to Ohm, enough is enough with the “‘inscription’ hack first exploited in 2022,” which started a trend of loading Bitcoin transactions with arbitrary data, which creates unnecessary burdens on node operators. 

Even the more efficient Runes are also on the chopping block because of the sheer volume of these transactions pushed onto the blockchain, despite their relatively small memory demand, capped at 80 bytes. 

Bitcoin as money faces other problems

Bitcoin-as-money proponents are fighting on multiple fronts, as the Bitcoin Policy Institute warned that the “window is narrowing” for Congress to extend de minimis tax exemptions for Bitcoin, while complex tax legislation takes a backseat as we approach summer and midterm elections become top of mind. 

Per recent Cryptopolitan reports, Coinbase also came under fire as its executive arm had to issue categorical denials to rumors that the exchange was pushing to exclude Bitcoin from the de minimis exemption that is the literal lifeline of the Bitcoin as money movement.