Foundry USA, the world's largest Bitcoin mining pool by hashrate, has launched a vote among its mining clients on whether to support Bitcoin Improvement Proposal 110 (BIP-110), a technical change that would reduce the amount of data allowed in Bitcoin transactions. The proposal directly targets Ordinals, a protocol that lets users embed images, text, and other data onto individual satoshis (the smallest unit of Bitcoin) to create non-fungible tokens (NFTs) on the Bitcoin blockchain. The vote will run until Bitcoin block 961,632 is mined, expected in early August.

What Is BIP-110 and Why Does It Matter?

BIP-110 is a proposed change to Bitcoin's protocol that would cap the data payload in transactions. Think of it like setting a size limit on how much extra information can be attached to a Bitcoin payment. Ordinals have become increasingly popular, allowing creators to inscribe digital art and other content directly onto the Bitcoin blockchain. However, critics argue that Ordinals have contributed to network congestion and driven up transaction fees for regular users who simply want to send Bitcoin to each other.

The debate reflects a fundamental tension within the Bitcoin community. Some see Bitcoin as primarily a peer-to-peer electronic cash system, where the focus should remain on fast, cheap payments. Others view Bitcoin as a platform capable of supporting broader applications, including digital collectibles and data storage. This disagreement has sparked significant discussion among developers, miners, and influential figures in the cryptocurrency space.

Who Opposes BIP-110 and Why?

Prominent Bitcoin advocates have publicly voiced concerns about the proposal. Adam Back, CEO of Blockstream, and Michael Saylor, chairman of Strategy, have both warned that BIP-110 could be misused to invalidate regular transactions or freeze user funds. Their opposition carries considerable weight because both are highly respected figures in the Bitcoin ecosystem.

"The proposal could be misused to invalidate regular transactions or freeze user funds, potentially undermining the security and fungibility of Bitcoin," Back and Saylor argued, according to reports on the debate.

Adam Back, CEO at Blockstream; Michael Saylor, Chairman of Strategy

Fungibility is a critical property of money. It means that one unit is interchangeable with another without loss of value. If certain transactions could be selectively invalidated, Bitcoin's fungibility would be compromised, making some bitcoins less valuable than others. This concern highlights why protocol changes in decentralized networks require careful consideration and broad consensus.

How Much Influence Does Foundry USA Actually Have?

Foundry USA currently accounts for approximately 23.8% of Bitcoin's total hashrate, the computational power that secures the network and validates transactions. This gives the pool's clients significant influence over the network's direction. The vote Foundry is conducting among its mining clients is not binding, meaning miners are not required to follow the outcome. However, it serves as a signal of sentiment within a large portion of the mining community.

Foundry's decision to hold the vote reflects its role as a key intermediary between individual miners and the broader Bitcoin protocol. Many small and mid-sized miners lack the technical expertise or resources to independently evaluate complex protocol proposals. By polling its clients, Foundry is democratizing input on a contentious issue and giving miners a voice in shaping Bitcoin's future.

How to Understand Bitcoin's Governance Challenge

• Decentralized Decision-Making: Unlike traditional software projects controlled by a single company, Bitcoin changes require consensus among miners, developers, and node operators spread across the globe, making agreement difficult to achieve.
• Technical vs. Philosophical Disagreement: The BIP-110 debate is not purely technical; it reflects competing visions for what Bitcoin should be, pitting transaction efficiency against platform flexibility.
• Miner Influence on Protocol Direction: Miners control which transactions are included in blocks and can signal support or opposition to proposed changes, giving them outsized power in Bitcoin governance decisions.

What Happens Next and Why It Matters?

The vote will continue until early August, giving the Bitcoin community time to debate the proposal's merits. The outcome remains uncertain, but the discussion itself highlights the decentralized and often contentious nature of blockchain governance. Whether BIP-110 gains traction or fails, the debate will likely influence future proposals and the ongoing evolution of Bitcoin.

For Bitcoin users, the proposal's fate could affect transaction fees and network scalability. If Ordinals continue to consume block space, fees may remain elevated for regular payments. Conversely, if BIP-110 passes and limits data storage, the Ordinals ecosystem could shrink, potentially reducing demand for block space and lowering fees. For the broader crypto industry, the outcome sets a precedent for how protocol changes are debated and implemented in decentralized networks.

Foundry USA's move to poll its mining clients adds a layer of democratic input to a contentious issue. The vote demonstrates that even in a decentralized system, large intermediaries like mining pools play a crucial role in shaping consensus. As the Bitcoin community watches closely through early August, the result will reveal not just whether BIP-110 has support, but also how miners view Bitcoin's identity and future direction.