Bitcoin's BIP-110 proposal — formally titled "Reduced Data Temporary Softfork" — enters its mandatory signaling window at block 961,632, estimated to arrive August 9, 2026. The proposal would temporarily restrict non-financial data in Bitcoin transactions for approximately one year, targeting Ord...
"Bitcoin does not need guardians of purity. It needs guardians of neutrality." — Michael Saylor, Executive Chairman, Strategy (NASDAQ: MSTR)
Bitcoin's BIP-110 proposal — formally titled "Reduced Data Temporary Softfork" — enters its mandatory signaling window at block 961,632, estimated to arrive August 9, 2026. The proposal would temporarily restrict non-financial data in Bitcoin transactions for approximately one year, targeting Ordinals inscriptions, BRC-20 tokens, and Runes protocols. Miner support stands at approximately 2.64% of blocks, far below the 55% threshold required for activation. Only Ocean pool, operated by Bitcoin Core developer Luke Dashjr, has signaled. Foundry USA (25.5% of hashrate), AntPool (17%), F2Pool (18%), and ViaBTC (7.5%) have not signaled and show no indication of doing so.
The economic stakes are measurable but modest. BRC-20 tokens carry a $71 million market cap with $23 million in daily trading volume. Ordinals generated $46.8 million in secondary sales in March 2026 alone. Runes have produced nearly 2,500 BTC (~$170 million) in cumulative fee revenue since launch. These protocols represent a demand-side subsidy to miner security at a time when transaction fees constitute less than 1% of total miner income — a figure that makes the "spam" debate economically incongruent with the scale of the proposed intervention.
The mandatory window will run from block 961,632 through block 963,647. Nodes running BIP-110-enforcing software (primarily Bitcoin Knots) will reject any block that does not signal bit 4 during this period. The result is not a network-wide fork but a small minority chain split, with enforcing nodes diverging onto a lower-hashrate chain. The practical impact on Bitcoin's main chain is expected to be negligible.
BIP-110, published December 5, 2025 under the pseudonym Dathon Ohm with Luke Dashjr credited for the original draft, proposes time-limited consensus rule changes:
| Parameter | Value | |---|---| | New output script limit | 34 bytes | | OP_RETURN limit | 83 bytes | | Data push cap | 256 bytes | | Activation threshold | 55% (1,109 of 2,016 blocks per difficulty period) | | Mandatory signaling start | Block 961,632 (~Aug 9, 2026) | | Mandatory signaling end | Block 963,647 | | Lock-in block | Block 963,648 | | Activation block | Block 965,664 (~Sept 6, 2026) | | Expiration | 52,416 blocks after activation (~1 year) |
The proposal uses a modified BIP9 deployment mechanism with a reduced 55% threshold, down from the traditional 95% used in previous soft forks. This lower bar was itself a point of contention. BIP editor Mark "Murch" Erhardt stressed that the BIP number assignment was procedural, not an endorsement. The proposal reached "Complete" status in the BIPs repository on June 25, 2026.
The technical restrictions would cap most data pushes at 256 bytes, limit new outputs to 34 bytes (with an exception for OP_RETURN at 83 bytes), and restrict certain Taproot features that Ordinals and similar protocols exploit to embed arbitrary data. BIP-110 does not touch the OP_RETURN data size that Bitcoin Core previously expanded from 40 to 80 bytes as a default policy; it imposes a consensus-level cap.
The signaling data tells the story. Since the first BIP-110 signaling block was mined on March 1, 2026 — by Barefoot Mining via Ocean pool — adoption has failed to gain traction among economically significant miners.
| Metric | Value | |---|---| | Cumulative signaling blocks (since May 1) | ~38 out of 9,000+ | | Signaling rate | 0.42% of total blocks | | Current signaling (latest period) | ~2.64% of blocks | | Hashrate signaling | ~5 EH/s out of ~940 EH/s total | | Pools signaling | Ocean only | | Required for activation | 55% (1,109 blocks per period) |
Ocean pool began signaling by default on July 15, 2026, which accounts for the bump from sub-1% to the 2.6% range. No other pool has joined. The four largest pools — Foundry USA (25.5%), F2Pool (18%), AntPool (17%), and SpiderPool (9%) — collectively control approximately 70% of hashrate and have either explicitly declined or remained silent. F2Pool has refused outright.
The gap between 2.6% and the required 55% is not a gap that late momentum closes. It is a structural rejection by the mining economy.
BIP-110's proponents frame the proposal as defending Bitcoin's monetary purpose. Critics frame it as censoring fee-paying transactions. The data supports a more nuanced reading.
Revenue from targeted protocols:
Context within miner economics:
Transaction fees currently contribute approximately $300,000 per day to total miner revenue, comprising less than 1% of miner income. The remaining 99%+ comes from the 3.125 BTC block subsidy. During peak Ordinals activity in 2023, fees briefly constituted over 30% of revenue. Block 840,000 (the April 2024 halving block) generated 37.6 BTC in fees alone — a historical outlier.
The economic argument cuts both ways. At less than 1% of miner revenue, Ordinals-related fees are not currently a critical security subsidy. But the directionality matters: as block subsidies halve every four years, any proposal to restrict fee-generating demand is a proposal to narrow Bitcoin's long-term security budget. The foundational question is whether Bitcoin's block space should price all willing demand equally, or whether consensus rules should preference monetary transactions.
This aligns with the broader observation that Bitcoin requires $54-72 billion annually to secure what generates only $115 million in fee revenue — a sustainability gap that restricting fee-generating activity would widen.
BIP-110 is less a technical proposal and more a governance experiment. The modified BIP9 mechanism with its 55% threshold and mandatory signaling window represents an unprecedented activation strategy.
Node distribution provides a misleading signal. Bitcoin Knots, the implementation that includes BIP-110 enforcement, runs on approximately 22% of the ~23,795 reachable nodes as of late June 2026. Saylor's August 2 rebuttal directly addressed this: "Less than 1% of Bitcoin's economic weight has adopted BIP-110. The claim that 16%-18% of nodes equals 16%-18% support confuses software distribution with economic consensus."
The distinction between node count and economic weight is critical. Exchanges, custodians, ETF platforms, wallet providers, and payment processors — the entities that constitute the economic majority — have not adopted BIP-110. No major institutional player has announced support.
The mandatory signaling window creates an unusual dynamic. Beginning at block 961,632, BIP-110-enforcing nodes will reject any block that does not signal bit 4. This does not force miners to signal; it forces enforcing nodes to reject non-signaling blocks. The result is that enforcing nodes will follow only the minority chain produced by the ~2.6% of hashrate that signals.
This is the inverse of how successful Bitcoin soft forks have historically operated. Segwit, for example, achieved activation with 99.7% miner signaling. Taproot activated with 90%+ signaling. BIP-110 attempts enforcement without consensus — a model Bitcoin's governance architecture was not designed to support.
The mandatory signaling window will produce a de facto chain split, though its severity depends on the enforcing node population.
Scenario analysis:
| Scenario | Probability | Outcome | |---|---| | Miners rapidly adopt (>55%) | Near zero | Full activation; Ordinals restricted for ~1 year | | No change in signaling (~2-3%) | High | Enforcing nodes fork to minority chain; main chain unaffected | | Ocean increases hashrate materially | Low | Slightly larger minority chain; still no activation |
At current hashrate levels, the minority chain would produce blocks at approximately 1/40th the speed of the main chain, with difficulty adjustment taking weeks to normalize. The chain would be economically insignificant — no major exchange, custodian, or wallet has indicated it would recognize the minority chain.
Adam Back, Blockstream CEO, warned that BIP-110 supporters would effectively create "a separate blockchain rather than changes to Bitcoin itself." Jameson Lopp echoed concerns about the activation parameters being "reckless and technically flawed."
The custody implications are non-trivial for institutions. Crypto-Finance, a subsidiary of Deutsche Börse, published an analysis noting that a chain split would force custodians to make replay protection decisions and potentially manage assets on both chains — an operational burden with no economic justification given the minority chain's expected value.
The Ordinals developer community has already published a technical workaround. By splitting larger data payloads into 256-byte chunks spread across multiple transactions, inscription activity could continue even under BIP-110 rules — albeit at higher cost and lower efficiency.
This workaround undermines BIP-110's stated purpose. If the restriction is circumventable, the proposal would impose costs on legitimate users (higher fees from multi-transaction fragmentation) without eliminating the activity it targets. The net effect would be a less efficient network that still carries "non-monetary" data.
The workaround also demonstrates a fundamental asymmetry in Bitcoin governance: consensus rules can restrict specific data structures, but they cannot restrict the economic demand that generates them. Users willing to pay for block space will find ways to use it.
The institutional response has been uniformly negative or silent, which in Bitcoin governance amounts to the same thing.
Named opposition:
Institutional silence (no support announced):
The absence of institutional support is itself the data point. Bitcoin's economic consensus operates by default: the status quo persists unless an overwhelming majority agrees to change it. BIP-110 has not approached that threshold by any measure — hashrate, node economic weight, or institutional endorsement.
BIP-110 will enter its mandatory signaling window around August 9, 2026, and will fail to activate on Bitcoin's main chain. The data is unambiguous: 2.6% hashrate support does not produce consensus changes in a network that historically requires 90%+ agreement for soft forks.
The proposal's significance lies not in its technical fate but in what it reveals about Bitcoin governance under stress. The Ordinals debate — whether Bitcoin block space should serve monetary transactions exclusively or price all demand equally — is a legitimate economic question. But BIP-110 attempted to resolve it through an activation mechanism that circumvented the consensus process Bitcoin was designed to enforce. The market, measured by hashrate, institutional adoption, and economic node weight, has delivered its verdict.
The minority chain that emerges from the mandatory signaling window will serve as a case study in Bitcoin's resistance to contested rule changes — a property that institutional investors cite as a core value proposition. In that narrow sense, BIP-110's failure to activate is itself a demonstration of the system working as designed.
For market participants, the practical implication is negligible. No portfolio action is warranted. The main Bitcoin chain will continue operating under existing consensus rules, Ordinals and Runes activity will persist, and the BIP-110 enforcing chain will likely fade into irrelevance within weeks of its creation.