BTC Current Affairs

BIP-110's Rough Ride: Bitcoin Enters Contested Soft Fork with Miners Barely Onboard

2026-08-09

Bitcoin has now reached block 961,632, which triggered the long-awaited mandatory signaling period for BIP-110. It's a controversial proposal designed to temporarily curb non-financial data from being embedded on the network. The signaling phase began at around 19:35 UTC on Saturday, but here's the catch: miner support barely exceeds 2.5%. You need 55% to actually lock this thing in.

So what is BIP-110, exactly? It's a proposed temporary Bitcoin soft fork that restricts arbitrary non-financial data in transactions for about one year. The full name is the Reduced Data Temporary Softfork (RDTS), and it's designed to target Ordinals inscriptions, BRC-20 tokens, Runes, and oversized OP_RETURN payloads. It locks in no later than block 963,648 (roughly late August) and activates new transaction rules at block 965,664, currently projected for early September 2026. The restrictions run for 52,416 blocks—approximately one year.

The controversial bit? It's not the proposal itself. It's how it's trying to activate. BIP-110 is being pushed as a user-activated soft fork (UASF), meaning it relies on node operators to enforce the rules, not miners. Standard Bitcoin soft forks, under BIP 9, require 95% miner support to activate. This is different. This is users saying "we're enforcing it anyway."

Prominent voices have lined up against it. Michael Saylor and Blockstream CEO Adam Back have both voiced opposition. The precedent BIP-110 supporters cite is SegWit's 2017 activation via BIP-148. That was also a UASF. And yes, it worked. But here's where the analogy breaks down in a crucial way: SegWit had economic-majority alignment. Major exchanges, wallet providers, Bitcoin-accepting businesses, and users all signalled they'd follow the UASF chain. Faced with mining a worthless chain, Bitmain and other pools calculated that resisting was more costly than complying. BIP-110 has node-operator support. It does not have economic majority support. That's a problem.

Chain fragmentation is the real risk. When nodes enforcing BIP-110 encounter a block that doesn't have the required version bit 4 signal, they reject it and split off from the main Bitcoin chain. The data suggests that during the prior 2,016-block period, support was too low for a competitive chain to form. The dominant chain is still being extended without broad signaling. Any rival branch depends on whether miners materially increase participation. With limited support, a BIP-110 branch would advance slowly and could stall entirely if miners keep extending blocks that enforcement nodes won't accept.

Users adopting BIP-110 will reject the network that almost the entire mining sector is building. You'd end up with two competing Bitcoin networks: the dominant mainnet backed by the vast majority of hash power and institutional capital, and a minority chain populated exclusively by BIP-110 enforcing nodes.

Some supporters have explored more radical contingencies. Bitcoin developer Chris Guida has dusted off code that could swap the mining algorithm on a breakaway BIP-110 chain if supporters fail to overcome miners' resistance. With the activation height closing in fast, supporters are now openly floating a proof-of-work swap if BIP-110 leaves them stranded on a weak minority chain that stops moving.

The episode crystallizes a deeper question about Bitcoin governance. Bitcoin strongly prefers soft forks with a deliberately high activation bar: rough consensus is needed across developers, miners, node operators, businesses, and users. No single group can force a change on the others. BIP-110's attempt to bypass that consensus through UASF reveals the fragility of node-only enforcement when economic actors remain uncommitted. The coming weeks will test whether a minority branch can survive or whether it'll be abandoned as economically unviable.

Source & further reading:

Sources