Is a proposed solution to Bitcoin's Ordinals problem actually worse than the problem itself? Adam Back, CEO of Blockstream, thinks so. He has publicly opposed a Bitcoin Improvement Proposal (BIP-110) aimed at curbing 'spam' by limiting data storage in transactions. Back argues that this fix could undermine Bitcoin's credibility as a secure store of value, rather than addressing the issue effectively.
The proposal, introduced by the pseudonymous developer Dathon Ohm in December, has gained traction with nearly 7.5% of Bitcoin nodes signaling readiness. It seeks to temporarily reduce the amount of data, including images, videos, and audio, that can be stored in Bitcoin transactions, in an effort to combat 'data abuse'.
However, Back believes this approach is a 'lynch mob' attempt to push through changes without consensus. He argues that spam, while annoying, doesn't pose a significant security threat. Instead, he suggests that the community should focus on longer-term solutions.
The controversy arises from the potential for BIP-110 to freeze funds by making certain unspent transaction outputs (UTXOs) unspendable. While Ohm acknowledges this risk, he claims the proposal is designed to avoid impacting known use cases.
The debate over Bitcoin's future is further complicated by the rise of non-financial transactions, such as Bitcoin Ordinals. Proponents argue that these transactions have contributed significantly to Bitcoin's security by generating transaction fees. However, data from Dune Analytics reveals that Ordinals inscription fees have declined to less than $10,000 per day, making it challenging for miners to rely on them for revenue.
The question remains: is BIP-110 a necessary step towards a more secure Bitcoin, or is it a short-term fix that could inadvertently harm the network's long-term health?
