Bitcoin Spam, BIP110, and the Politics of Blockspace

Summary

The February 21, 2026 episode of the Stephan Livera Podcast features Charlie Spears dissecting ongoing battles over so-called Bitcoin spam, ordinals, and the proposed BIP110 soft fork. Spears argues that fee markets already constrain arbitrary data, that consensus changes aimed at specific use cases are unlikely to stop determined actors, and that moralized filtering undermines Bitcoin’s neutrality. He links these debates to client diversity, emerging L2 ecosystems, and efforts like the OP Next conference to bring developers, miners, and institutions into the same room when protocol changes are on the table.

Take-Home Messages

1. Fee Markets vs Spam Controls: Spears maintains that rising fee rates naturally price out many inscription schemes, while policy or consensus filters offer only temporary relief.
2. Legal Risk and Protocol Neutrality: Attempts to redesign Bitcoin to avoid illegal or controversial onchain content risk tying protocol rules to shifting national laws and moral standards.
3. Limits of BIP110: BIP110 would likely break current spam tactics but encourage new, only slightly more expensive data-embedding schemes, calling its long-term effectiveness into question.
4. Client Diversity as Risk Management: Heavy reliance on Bitcoin Core as a de facto reference client concentrates power and increases the stakes of any governance conflict or software bug.
5. L2 Mapping and Institutional Engagement: Projects like Bitcoin Layers and OP Next aim to clarify L2 trust models and pull institutional capital into direct dialogue with developers and miners.

Overview

Charlie Spears situates today’s spam conflict as the latest phase of a debate that stretches back to early OP_RETURN arguments and resurfaced with ordinals in early 2023. He notes that little genuinely new information has appeared since those first mailing list exchanges, even as rhetoric around BIP110 and filtering has escalated. Livera highlights Libra Relay as one meaningful change in the relay landscape but agrees that fundamental questions remain unresolved.

Spears argues that long-term reliance on policy-based filters is unrealistic if Bitcoin faces serious adversaries and insists that only consensus rules can tightly constrain data formats. At the same time, he emphasizes that fee markets already penalize large inscriptions and that what many call spam falls sharply when fee rates rise toward 100 sats per vbyte. He describes himself as an “accelerationist,” preferring that relatively benign ordinals test the system today rather than waiting for more adversarial data uses later.

When discussion turns to illegal and controversial content, Spears rejects the idea that protocol rules should be shaped by what a few jurisdictions deem unacceptable. He criticizes proposals to curtail contiguous data primarily to reduce legal risk, calling this a fundamental departure from Bitcoin’s design as neutral infrastructure. Livera explains for listeners that arbitrary data can already be embedded in multiple transaction fields, making sharp distinctions between “normal” and “spam” data technically awkward.

Spears contends that BIP110 would eliminate the current popular data-embedding schemes but cannot prevent new ones from emerging with only modest additional cost. He warns that such soft forks impose heavy social and governance costs on the Bitcoin community while speculative users and potential attackers adapt quickly. Both he and Livera conclude that higher organic monetary use, regular dollar-cost-averaging, and widespread withdrawal to self-custody would do more to price out spam than repeated, contentious soft forks.

Implications and Future Outlook

Spears treats BIP110 as an example of how narrowly targeted consensus changes can set a precedent for editing the protocol whenever cultural or moral concerns flare. If each perceived misuse of blockspace triggers a new soft fork, he argues, Bitcoin could drift toward a permanently politicized governance process that erodes confidence in its long-term rules. For policymakers and institutional holders, this raises questions about whether the system remains predictable enough to serve as a reserve or long-horizon treasury asset.

The conversation also underscores the importance of broadening participation in protocol discussions beyond a small subset of developers and activists. Spears wants miners, institutional investors, and technical educators in the same room so that proposals like the “great consensus cleanup” are evaluated with a full view of operational and market consequences. In parallel, efforts to map L2s, bridges, and wrapped Bitcoin highlight how much of the Bitcoin economy now sits in systems with additional trust assumptions, suggesting a growing agenda for risk disclosure and oversight.

Some Key Information Gaps

1. How resilient is the current fee market at pricing out non-monetary inscriptions during sustained periods of higher demand? Answering this would indicate whether spam can be durably contained through normal economic activity rather than repeated consensus intervention.
2. How likely is it that regulators or governments will focus on embedded onchain data as a primary vector for attacking Bitcoin? Clarifying this risk is essential for weighing proposals that would trade protocol neutrality for reduced legal exposure.
3. To what extent would BIP110 actually reduce total spam volume once secondary markets adapt with new data-embedding schemes? Evidence here would show whether spam-focused soft forks meaningfully change long-run usage patterns or simply trigger an arms race.
4. What minimum level of client diversity is needed to reduce systemic risk from bugs or social capture in a dominant implementation? Establishing such thresholds would help guide funding, engineering, and governance priorities around alternative clients.
5. How accurately do users and institutions understand the trust assumptions behind popular L2s, side systems, and wrapped Bitcoin arrangements? Understanding this gap would inform communication, product design, and possible regulatory guidance across the broader ecosystem.

Broader Implications for Bitcoin

Fee Markets as Governance

Bitcoin’s ability to price out unwanted uses through fee markets becomes a central governance question when compared to rule-based filtering. If higher monetary use reliably suppresses low-value inscriptions, policy choices that focus on adoption and self-custody may offer more durable spam control than soft forks. Over the next five years, empirical research on fee dynamics could shape whether stakeholders trust markets or rules as the primary mechanism for allocating blockspace.

Legal Risk vs Protocol Neutrality

Debates about illegal or controversial onchain data expose a tension between minimizing regulatory risk and preserving a neutral protocol. If consensus rules start mirroring specific legal regimes, Bitcoin’s value as borderless infrastructure could erode even as some forms of risk decline. Policymakers and industry actors will likely face pressure to develop approaches that address harmful content without turning the base layer into a vehicle for jurisdiction-specific censorship.

Client Diversity and Systemic Resilience

Reliance on a single dominant implementation amplifies the impact of any technical bug or social controversy around its maintainers. As institutional balances and mining operations grow, incentives to fund and maintain independent clients may become a key factor in systemic resilience. A more diverse client landscape could also rebalance governance dynamics, making it harder for any one group to steer policy debates or soft-fork timelines unilaterally.

Expanding Perimeters Through L2s and Bridges

The growth of Layer 2s, side systems, and wrapped representations extends the effective perimeter of the Bitcoin economy beyond the base chain. Each design carries distinct trust assumptions, failure modes, and regulatory exposures that may not be obvious to users or treasuries holding wrapped assets. Over a 3–5 year horizon, systematic mapping of these systems could become a prerequisite for informed risk management, prudential regulation, and cross-chain policy coordination.

Institutions in the Consensus Conversation

As conferences like OP Next bring miners, developers, and institutional analysts together, the informal norms that govern soft forks and protocol roadmaps may shift. Large holders and service providers could either become stabilizing forces that resist frequent, politicized changes or new sources of pressure for adjustments aligned with their business models. The balance struck will influence how credible Bitcoin remains as a long-term settlement layer in an increasingly financialized environment.