BITCOIN IS BECOMING FIAT
There are real financial incentives to flood Bitcoin with non-monetary data including .jpegs, inscriptions, ordinals, and tokens.[1][4][5][6][7]
- At scale, VC capital is paying for Bitcoin to not be Bitcoin. My independent research across 169 companies found that 56% of "Bitcoin-companies" have drifted into non-Bitcoin products, including every single company with a raise above $50M.[2]
- STRC's Cantillon reconstruction on the protocol is another example of this.[3] It's the very "financial engineering" Bitcoin was designed to end.
- Many of the largest Bitcoin influencers, educators, and conference organisers are funded by the same fiat structures they claim to oppose.[8] Sponsorship, affiliate, and ad revenue create a feedback loop where the creator cannot scrutinise the company paying for their reach. At $480,000 for a single sponsorship deal, the financial incentive to stay silent is structural, not personal.[8]
Across the entire industry, from development to marketing, the money is on the side of making Bitcoin not Bitcoin.
BITCOIN IS MONEY
Bitcoin was created to be money: "A peer-to-peer electronic cash system." That is the title of the white paper and the entire point of the protocol.[9]
For 5,000 years, every civilisation that handed control of its money to a central authority followed the same sequence: Debasement, inflation, inequality, collapse, reset.[11] The flaw was centralized trust. Bitcoin is the first technology in history that removes it entirely, enforcing a fixed supply through mathematics and a decentralised network distributing trust.
That is one of Bitcoin's most important contributions and it only works if the network stays decentralised.
THE PROBLEM
When non-monetary data floods the chain, it triggers a sequence that leads to Bitcoin becoming a vehicle to perpetuate fiat.
The more non-monetary data, the faster the blockchain grows, which raises the cost of running a full node, which reduces the number of people who can participate, which weakens decentralisation, which compromises security, which means Bitcoin stops being the tool that ends the 5,000-year fiat extraction cycle.[11]
THE SOLUTION
BIP-110 is a temporary soft fork that restricts non-monetary data at the consensus level. Over 21% of reachable nodes have already migrated to Bitcoin Knots, and now over 13% are also running BIP-110 (aka RDTS).[10] This combo is a measurable signal that a meaningful portion of the network still treats Bitcoin as money.
The protocol is intact. Almost 12,000 nodes are enforcing Bitcoin as money by signalling for BIP-110.[10] Everything is becoming more visible. Thousands of nodes holding the line is the signal that matters.
CONTEXT & SOURCES
I referenced my own work a lot here but each piece contains independent research and refers to the work of others:
[1] Liberati, D. (2026, June 12). Fiat incentives in Bitcoin: A department-by-department map. https://daniella.io/fiat-incentives-everywhere/
[2] Liberati, D. (2026). Why Bitcoin companies drift. https://daniella.io/bitcoin-funding
[3] Liberati, D. (2026, June 12). STRC explained: The Cantillon effect rebuilt on Bitcoin. https://daniella.io/bitcoin-strc
[4] Liberati, D. (2026, June 9). Bitcoin Core vs Bitcoin Knots + BIP 110: Which node should you run? https://daniella.io/core-vs-knots/
[5] hodlonaut. (2026, March 27). The capture: The network. Citadel21. https://www.citadel21.com/the-network
[6] hodlonaut. (2026, April 29). The capture: The lever. Citadel21. https://www.citadel21.com/the-lever
[7] hodlonaut. (2026). The capture: The merge. Citadel21. https://www.citadel21.com/the-merge
[8] Liberati, D. (2026). How money shapes the signal. https://daniella.io/bitcoin-marketing
[9] Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system. https://bitcoin.org/bitcoin.pdf
[10] Dashjr, L. (2026, June 22). Bitcoin network statistics. Luke Dashjr. https://luke.dashjr.org/programs/bitcoin/files/charts/services.html
[11] Liberati, D. (2026). The 5,000-year economic karmic cycle that Bitcoin is ending [Video]. YouTube.[12] Liberati, D. (2026, June 1). Nostr's retention problem: A structural diagnosis. https://daniella.io/nostr-retention-structural-diagnosis/
[13] Liberati, D. (2026, June 14). The comfortable trap: The fiat-to-Bitcoin transition. https://daniella.io/the-comfortable-trap/
Additional reading:
Liberati, D. (2026, May 21). The 5,000-year economic karmic cycle that Bitcoin is ending. https://daniella.io/fiat-money-karmic-cycle/
Liberati, D. (2026, May 7). The prison door is open.
If blocks are full, the speed at which the blockchain grows is 1 block every ten minutes -- regardless of what kind of transactions are in the blocks. It cannot be faster than this because of the difficulty adjustment.
So the only way that non-monetary data could make the blockchain grow faster is if you believe there are not enough monetary transactions to fill blocks. Is this something you think is currently true? And if so, is it your preference that there is no increase to the number of monetary transactions per block:
Since it seems that you are concerned with the size of the blockchain, why aren't you advocating for a blocksize decrease which would do a much better job of solving your "blockchain is growing too damn fast" problem?
Unless advances in computing stall out, shouldn’t a linearly growing blockchain be increasingly easy to store over time?
Unless
(I think they’re already stalling out since we’re manufacturing CPUs at the nanometer scale where quantum effects become relevant.)
Do you expect less than linear growth from here on out?
You mean blockchain size? It's bounded by linear growth, so this question confuses me. It can basically only be linear or less because it's O(n).
No, I mean for progress in computing. Linear growth in blockchain size is only a problem for new node runners if the technology running the nodes stops increasing at a greater than linear rate.
NO, you're gay. Get on the BIP-110 scam train, sucker
You're just full of good points today. You must have needed that vacation.
I prefer "insightful"; identify as it, one might say
You're right that block frequency is fixed by the difficulty adjustment. But block frequency and blockchain growth rate in bytes are different things.
Before Feb 2023, average block size was ~1.2 MB. After ordinals and inscriptions began exploiting the SegWit witness discount, average block size rose to ~2.29 MB at its peak in March 2024. That's roughly a 75-90% increase in bytes per block at the same 10-minute interval. The blockchain grew ~90 GB in a single year during 2023-2024.
This is what makes it more difficult to run a node, because you need better hardware and more storage space. I've tried, it's near impossible to properly download and run a full node on an RPi4 or even a RPi5 since 2025.
It's because inscriptions stuff arbitrary data into the witness section at a 75% weight discount. That discount was designed to incentivize SegWit adoption for monetary transactions, not to subsidize data storage. Since Feb 2023, non-monetary transactions have occupied approximately 50% of available blockspace. Full documentation here: https://wtfhappenedinfeb2023.com/stats-about-spam
So the chain does grow faster in absolute terms when non-monetary data fills blocks to capacity at subsidized rates. That's the specific problem BIP-110 addresses.
As for "why not advocate a blocksize decrease:" Because the problem isn't monetary transactions. It's non-monetary data displacing them while paying less per byte via the witness discount. Restricting non-monetary data at the consensus level is a more targeted solution than shrinking blocks for everyone.
Here's a predicted next block on mempool.space:
Most of the highlighted transactions are runestones or something. Correct me if I'm wrong, but all of those are BIP110 compliant and will continue to be included in blocks even after BIP 110 activates.
It seems to me that you may dislike the concept of a witness discount. If not, I don't understand how your proposal (or any proposal) will successfully limit the presence of transactions with arbitrary data in valid blocks.
the blocksize limit still seems like the best tool for controlling node-runner costs.
Appreciate the constructive comment.
You're partially right: Simple rune operations (basic mints, transfers with few edicts) encode compactly and would likely fit within BIP-110's 83-byte OP_RETURN cap. Complex operations (full etchings with name, symbol, premine, divisibility, spacers, cap, amount, height parameters, plus multi-output airdrops with many edicts) would exceed it.
But the main blockspace driver since February 2023 has not been runes. It has been inscriptions, which embed arbitrary data (images, files, executable code) directly into Taproot witness fields via OP_IF/OP_NOTIF script structures. That is where the bulk of the non-monetary blockspace consumption comes from. BIP-110 Rule 7 bans OP_IF and OP_NOTIF in Tapscript, which would effectively prevent inscription creation. Rule 2 (256-byte data push limit) constrains it further.
BIP-110's own text explicitly states: "This proposal does not aim to eliminate spam entirely" and notes that token protocols are "best countered in policy rather than consensus." It is a targeted first step at the consensus level, not a comprehensive solution to all non-monetary use. The fact that simple token transfers still fit in 83 bytes is by design, not an oversight.
On the witness discount: You're right that I have concerns about how it's being exploited. BIP-110 addresses the vectors (the script structures used to embed large data) rather than the discount itself. The BIP's rationale discusses this trade-off explicitly and opts for simplicity and speed of deployment, noting that more comprehensive changes could be pursued after the temporary period expires.
The blocksize limit and BIP-110 address different layers. The blocksize limit controls total growth. BIP-110 targets what fills that space.
I'm using bitcoin and interested in it because I want censorship resistant money (don't get hung up on this, I'm not accusing you or BIP 110 of censorship). We achieve this by having a set of block validation rules and not seeing it as our concern what someone does within that.
Now, let's accept for a moment your contention that the current block validation rules have a vulnerability in them and let's say we all run BIP 110 and correct it.
Do you think it is possible that we will get to a point where there is disagreement about whether a certain kind of transaction is "monetary" or not and it won't be clear cut?
I highly doubt that all the humans of the world who want to use bitcoin will be able to agree on what counts as monetary and what does not.
It seems then that there will be some point where we must say: follow these rules and it's a valid transaction (regardless of whether a person is trying to embed data in it or not).
Personally, I think the current block validation rules are plenty good. I run a node. I'm a merchant who accepts bitcoin. I don't believe that adoption is primarily limited by the difficulty of running a node.
read what Scoresby said again. They're not displacing monetary transactions.
In fact, part of the reason Bitcoin is failing is that there are no monetary transactions. Everything's financialized and Saylor-ized now.
Yeah. I'd like to see some proof of that first.
This could use some historical context. When segwit was proposed, it was clearly communicated that segwit would increase the blocksize up to a maximum of just under 4 MB. Bitcoin Core’s 2015 Capacity Increases FAQ estimated that blocks composed of standard single-signature txs would have about 1.6 MB, and that the blocksize would likely increase to slightly larger than 2 MB with more complex transactions.
Indeed 2.2 is about 1.83×1.2, and the 7-day average blocksize peaked to above 2.2 MB twice in February and March 2024.
However, I’d like to point out that the yearly blockchain growth did not increase by 75–90%—which a reader might infer from how that paragraph was phrased—it increased by less than 50% from 2022 to 2023.
So, in the historical context, we got only in 2023 into the estimated range of what was accepted when segwit was adopted, when the blockchain grew by 53,999 blocks and 92.0 GB—or 1.70 MB per block. Since that peak, block size has been receding: in 2025 we had 53,082 blocks and 83.5 GB blockchain growth for 1.57 MB per block in average, which is around the lower end of the estimated blocksize for segwit adoption.
In other words, blocks have been smaller than expected.
Appreciate the constructive comment, thanks for the historical context and data.
The 75-90% figure was specifically about per-block size, not yearly blockchain growth. Your own calculation confirms this: You note 2.2 is about 1.83x of 1.2, which is an 83% increase in bytes per block. The 2.29 MB peak I cited from March 2024 (from mempool.space 7-day average data) puts it at ~91%. So the per-block claim holds within the stated range.
You're right that a reader could infer I meant yearly growth increased by 75-90%. That's a fair criticism of my phrasing, and I should have been more precise. Your figure of less than 50% for total yearly growth is accurate.
Where I'd push back is on "blocks have been smaller than expected." The 2015 Capacity Increases FAQ projected 1.6 MB for blocks full of standard single-signature P2PKH transactions. Before February 2023, blocks averaged ~1.1-1.2 MB, well below that projection. What brought blocks up into the 1.6-2.2 MB range was primarily non-monetary data exploiting the witness discount, not a surge in monetary transaction demand. When blocks sit at 1.57 MB in 2025, a meaningful portion of that capacity is still non-monetary. Saying blocks are "smaller than expected" is technically accurate against the 2.0 MB multisig projection, but it frames the situation as though demand for monetary transactions filled those blocks to expectations. The composition tells a different story.
The decline from 2.29 MB (2024 peak) to 1.57 MB (2025) reflects cyclical inscription demand, not the problem resolving itself. The witness discount that makes data embedding economically attractive is unchanged.
Full blocks is the natural state of the Bitcoin system, because demand for cheap highly-replicated perpetual storage is unbounded. When monetary transactions don’t fill the blocks, the underdemanded blockspace will be filled with more frivolous things.
I could see how your observations might support an argument for a temporary blocksize reduction, or to reduce the witness discount, but I can’t figure out how you get from your observations to supporting the introduction of seven consensus rules that disrupt development of more sophisticated monetary rails and only impact ~3% of the data insertion transactions observed on the network at this time.
Fair point on the SegWit block-size context.
My main question is simpler:
Was the extra SegWit capacity meant to support monetary throughput, or to subsidise permanent arbitrary data markets?
And in your view, how have SegWit, Taproot, inscriptions, Ordinals, Runes and the related changes improved Bitcoin as money?
More specifically, how have they made the protocol more decentralised, easier for ordinary people to validate, and less vulnerable to attack?
I’m asking genuinely, since I’m not a developer and I’d like to understand the argument more clearly.
Yes.
It seems then that full smaller blocks would probably be better than partially full current size blocks. (unless this is just a temporary anomoly)
I think that once upon a more peaceful time, Luke was arguing 200kB soft-blocklimit (like it used to be 750kB) which was a meaningful thing to propose (though I wouldn't have gone for it personally)
It was 300kB.
https://diyhpl.us/wiki/transcripts/magicalcryptoconference/2019/why-block-sizes-should-not-be-too-big/
Thanks!
I see you found someone else correcting you haha
it's easier to correct people than to put yourself out there yourself
It's a free-for-all!
no, BIPtards don't think that far. They see kiddy porn and go "UUUH BAD, BITCOIN MONEY"... and cue Twitter drama.
Nothing to see here, folksNothing to see here, folks
It was also created without arbitrary filters, the "entire point of the protocol"™
Only semi-related, I find it jarring that filterers are so fast to resurrect BCH's primary argument. Why not use that existing fork if that is allegedly a key concern?
LOL, ridiculous.
Go put your money where your mouth is, so the rest of us can profit from your nonsense
https://beta.predyx.com/market/will-bip-110-activate-and-be-enforced-on-bitcoin-by-sept-1-2026-1770282509?ref=PREDYXTZ0UUNOP
Honestly wondering why you said "put your money where your mouth is." I'm all in on Bitcoin, value for value only, no ads, no sponsors. Not sure how to "put my money where my mouth is more than that." Bitcoin is money for me, every single day.
Then go use it, like I and others do.
Real transactions taking up space will make spam too expensive every day of the week.
You live value for value only? What do you think about #886778?
no, go bet your money on the Predyx BIP-110 market instead of voicing stupidies here
<marquee behavior="110bpm" direction="South Side"></marquee> /** * */ Miner Dash blows the hollow cat bone fluteHow is this different than what Ocean is doing with their shitcoin overlords?
You're right to ask, and I agree with you.
Ocean raised a $6.2 million seed round led by Jack Dorsey. One of the seed investors, Accomplice, has a broad crypto portfolio that includes Circle, the company behind USDC. Dorsey's own company Block began rolling out USDC support on Cash App in May 2026. And Tether, the issuer of the largest stablecoin in existence, became an operational partner in April 2025 by deploying hashrate on Ocean through DATUM.
I do not agree with stablecoins either.
USDC and USDT are fiat by another name. The fact that Ocean's lead investor now distributes USDC and their operational partner literally issues USDT is a problem by proxy. You called them shitcoin overlords and I can't argue with that characterisation of the money behind Ocean.
What I can say is that Ocean's product, as it stands today, does not serve those interests. The pool runs Bitcoin Knots, uses the DATUM protocol so miners build their own block templates, pays out non-custodially, and defaults to filtering non-monetary transactions. Since DATUM launched in September 2024, filtering is a miner-level decision, not a pool-level mandate. Every design choice in the product points at Bitcoin as money.
In my funding research across 169 companies, $6.2M falls in the $5-20M bracket where 60% of companies have drifted away from Bitcoin-only: https://daniella.io/bitcoin-funding/ So the pressure exists, especially with Tether in the picture.
Right now the product is Bitcoin mining. If Ocean's product changes to accommodate fiat interests of funders and partners, that could change things. The observation about fiat incentives shaping behaviour applies to everyone, including Ocean.
Bitcoin is money. Rug them. Bip-110.
The amount of logical back bending in these comments to justify spam leads me to think all that spam money for those spam companies might be here too... bitcoin is money gfy spammers it's an obvious attack
If you want to fork - you lose. Your choice.
You have beenn warned long time ago by Mircea Popescu
http://trilema.com/2015/if-you-go-on-a-bitcoin-fork-irrespective-which-scammer-proposes-it-you-will-lose-your-bitcoins/
Dropped your fork 𐂐
Take care now.
Thank God for Scoresby 🙏
Most sensible post ive seen on this retarded proposal
How much time until ASIC resistance BIP proposal from those guys?
They will be not in bitcoin anymore after fork make their money goes away.