News Block: CLARITY Act Faces Critical Test, Saylor Shares 110 Reasons Why BIP-110 Is a Bad Idea, Lyn Alden & Jeff Booth Launch $40M Bitcoin Company

**SPEAKER_1** (0:01)
Welcome to the Coin Stories News Block, powered exclusively by Ledn. I'm Natalie Brunell, and in about 10 minutes or less, I'll provide you with insightful updates on Bitcoin, financial markets and the global economy. Everything you need to know in one block. Let's go.
Bitcoin held up surprisingly well this past week, despite another escalation in the conflict between the United States and Iran. The US conducted a ninth consecutive night of strikes over the weekend and confirmed a third American service member killed. But Monday morning, Iran's foreign ministry signaled that negotiations could resume, sending oil lower and giving markets some relief. Bitcoin has been hovering around $65,000.
And while geopolitical uncertainty continues to dominate the headlines, another major catalyst for the digital asset industry at large is approaching in Washington.
NYDIG recently called the Clarity Act the most important forward catalyst for the entire industry. The bill would establish a comprehensive federal framework for digital assets markets, determining which assets fall under the SEC, which fall under the CFTC, and what rules apply across the board. You might recall us reporting that the House passed its version last year and the Senate Banking Committee advanced it 15 to 9 in May, but getting it to the Senate floor is the hard part. One of the biggest obstacles is an ethics provision that would restrict government officials and their families from profiting off of crypto, an issue that became even more contentious after President Trump's disclosure showed $1.4 billion in crypto income last year. Two key Democratic votes, Senators Galeo and also Brooks, have said they won't support the final passage without meaningful ethics restrictions. And as of this weekend, there's really no bipartisan agreement.
Prediction markets like Cal-She now put the odds of passage this year at just 32 percent. Senate Majority Leader Thune wants action before the August 7th recess, making the next few weeks critical. If lawmakers miss that window, what Nye did call the industry's most important catalyst could become another missed opportunity in Washington this year.
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Turning now to the fight happening inside Bitcoin. The debate over BIP 110 has become Bitcoin's most divisive internal battle since the block size wars of 2017
Here's what it's about in plain English. Over the past couple of years, people have started using Bitcoin's blockchain to store things beyond payments, images, tokens, collectibles, and that sparked a debate. Is this legitimate use of the network or is it spam clogging up the system?
Late last year, the main Bitcoin software, which is called Bitcoin Core, actually removed a limit on how much of this non-payment data could be embedded in transactions. That decision really angered some people who believe it opened the floodgates. They switched to an alternative software called Bitcoin NOTs, which keeps the restrictions and it now runs on roughly 15% to 20% of the network's nodes. But BIP 110 is yet another step. Instead of just choosing different software, they want to make these restrictions part of Bitcoin's core rules, meaning the entire network would reject blocks that contain certain types of data. And that's where the real controversy starts. Supporters argue this extra data is bloating the network, making it more expensive to run and pulling Bitcoin away from its core purpose as money. But on the other side, critics say that changing Bitcoin's rules to block certain types of valid fee-paying transactions even temporarily sets a dangerous precedent that could be used to restrict other things in the future. Michael Saylor and Lyn Alden both came out against it this week but for different reasons. Saylor published a 110 point article titled 110 reasons BIP 110 is a bad idea. He called it the Bitcoin iatrogenic proposal, which is a medical term for when a treatment causes more harm than the disease. His main argument is simple, that Bitcoin can't tell the difference between an image, a financial contract, a proof of ownership or something that hasn't been invented yet. It just sees data. And once you start changing Bitcoin's rules to block certain kinds of data, you've opened a door that's very hard to close. Who decides what's allowed next time? Saylor believes unwanted activity should be dealt with through fees. If you want to store data on Bitcoin, you pay for the space and miners decide whether to include it. That keeps the rules neutral. Changing the rules themselves is a much bigger deal. As he put it, Bitcoin does not need guardians of purity. It needs guardians of neutrality.