Bitcoin's most contentious governance dispute since the 2017 SegWit activation reaches its decisive phase this week. BIP-110, a proposed one-year soft fork that would restrict non-financial data — including Ordinals inscriptions, BRC-20 tokens, and Runes — from Bitcoin transactions, enters its ma...
"BIP 110 turns a spam dispute into a consensus change that would invalidate some currently valid, fee-paying transactions. That precedent is the danger." — Michael Saylor, Executive Chairman, Strategy (formerly MicroStrategy)
Bitcoin's most contentious governance dispute since the 2017 SegWit activation reaches its decisive phase this week. BIP-110, a proposed one-year soft fork that would restrict non-financial data — including Ordinals inscriptions, BRC-20 tokens, and Runes — from Bitcoin transactions, enters its mandatory signaling window at block 961,632, projected around August 7-9, 2026. The proposal requires 55% miner signaling (1,109 of 2,016 blocks per difficulty retarget period) to lock in. Current support stands below 1% of total network hashrate.
As of the most recent data, approximately 5 EH/s out of a network total near 940 EH/s has signaled for BIP-110. Only Ocean pool, co-founded by Bitcoin Core developer Luke Dashjr, has actively signaled. Foundry USA, AntPool, ViaBTC, and F2Pool — which collectively control the majority of Bitcoin's hashpower — have not signaled. F2Pool has publicly opposed the proposal. Activation appears near-certain to fail, but the mandatory signaling mechanism introduces a non-zero chain-split risk for nodes running BIP-110-enforcing software.
BIP-110, formally titled the "Reduced Data Temporary Softfork," was authored pseudonymously by "Dathon Ohm," with Luke Dashjr credited for the original draft and technical advice. The proposal introduces seven consensus rules designed to restrict arbitrary data storage on the Bitcoin blockchain:
These restrictions would invalidate the storage methods currently used by Ordinals inscriptions, which embed image and media data in Taproot witness fields. BRC-20 token minting, Runes protocol operations, and large OP_RETURN payloads would also be affected.
The rules are designed to be temporary. If activated, they would expire automatically after 52,416 blocks — approximately one year.
The proponents' stated rationale: non-financial data consumes block space that should be reserved for monetary transactions, inflates the UTXO set, increases node storage costs, and raises fees for ordinary Bitcoin users. During peak inscription periods in 2024 and 2025, simple Bitcoin transactions cost $20 or more in fees as users competed with inscribers for block space.
BIP-110's activation design is unusual and has drawn significant criticism. It uses a modified BIP9 deployment with a 55% miner signaling threshold — substantially lower than the 95% threshold used for SegWit (BIP141) and other major soft forks.
The proposal's authors justified the lower bar by arguing that the temporary nature of the restriction does not warrant the near-unanimity required for permanent consensus changes. Critics counter that any consensus change — temporary or permanent — carries the same systemic risks.
The timeline proceeds as follows:
| Milestone | Block Height | Projected Date | |-----------|-------------|---------------| | Mandatory signaling window opens | 961,632 | ~August 7-9, 2026 | | Lock-in deadline | 963,648 | ~August 21, 2026 | | Activation (if locked in) | 965,664 | ~September 1, 2026 | | Expiry (if activated) | ~52,416 blocks post-activation | ~September 2027 |
The mandatory signaling window is the most controversial element. From block 961,632 through block 963,647, nodes enforcing BIP-110 rules will reject any block that fails to signal bit 4 in its version field — regardless of whether the block is otherwise valid. This mechanism forces a resolution: either miners signal and BIP-110 locks in, or enforcing nodes fork themselves onto a minority chain.
For comparison, SegWit's activation required 95% signaling and ultimately needed the threat of a user-activated soft fork (UASF via BIP-148) to compel miner compliance. BIP-110 starts with a lower threshold but also incorporates UASF-style mandatory enforcement, a combination that critics describe as premature.
The data is unambiguous: BIP-110 has failed to secure meaningful miner support.
The 55% threshold requires 1,109 out of 2,016 blocks in a difficulty retarget period. At current signaling rates, BIP-110 receives approximately 17 blocks per period — roughly 98.5% short of the requirement.
Bitcoin Core, the reference client used by the majority of the network, has not merged BIP-110's implementation. Signaling support exists primarily through Bitcoin Knots, a fork of Bitcoin Core maintained by Luke Dashjr. Bitcoin Knots nodes constitute between 8% and 23% of reachable nodes depending on the measurement methodology. According to Casa CTO Jameson Lopp, cheap Tor nodes make raw counts easy to inflate, and the actual percentage of economically significant nodes running BIP-110-capable software is disputed.
As of early 2026, an estimated 583 out of approximately 24,481 reachable nodes (2-3%) ran BIP-110-compatible software. Not all Bitcoin Knots nodes necessarily enforce BIP-110 rules.
BIP-110's proponents frame the issue as block space misuse. Opponents frame it as fee-paying transaction censorship. The economic data complicates both narratives.
Inscription market activity (2026):
Miner revenue impact: During peak inscription periods in 2024-2025, fee revenue constituted over 60% of total miner compensation in some months — an unprecedented ratio. The April 2024 Runes launch produced the highest-fee block in Bitcoin history, with miners earning more than $2.4 million in a single block.
In 2026, with Bitcoin mining difficulty at 126.23 trillion and network hashrate down approximately 20% year-over-year to ~919-940 EH/s, inscription fees represent a meaningful economic lifeline for operators. Some mining pools have prioritized inscription-heavy blocks when profitable. Restricting this revenue source during a period of already-compressed mining margins creates a direct economic disincentive for miner support — which the signaling data reflects.
BIP-110 has attracted organized opposition from several of the most prominent figures in the Bitcoin ecosystem.
Michael Saylor (Executive Chairman, Strategy): Published "110 Reasons BIP-110 Is a Bad Idea" on X on July 18, 2026. Saylor's central argument: "The proposed cure is more dangerous than the condition. BIP 110 would use consensus to narrow valid activity, constrain future options, complicate deployment, and establish a precedent it cannot later erase." Saylor emphasized that he shares the proponents' goals — keeping validation cheap, payments affordable, and Bitcoin focused on sound money — but rejects their method. "Bitcoin does not need guardians of purity. It needs guardians of neutrality," he wrote.
Adam Back (CEO, Blockstream): Warned the proposal risks a Bitcoin chain split and described the activation parameters as "reckless and technically flawed." Back stated that BIP-110 supporters could inadvertently create a separate chain if they enforce rules without broad consensus, which he characterized as a form of "idiocracy."
Jameson Lopp (CTO, Casa): Published a detailed technical critique arguing BIP-110 raises chain-split risk, can freeze edge-case funds, constrains future protocol upgrades, and ultimately fails to achieve its stated goal because "users can route around the rules." Lopp described the proposal as a "slippery slope to centralization and control."
An organized opposition campaign operates through nobip110.com, consolidating technical and economic arguments against the proposal.
On the proponents' side, Luke Dashjr and the Ocean pool team maintain that unrestricted data storage threatens Bitcoin's long-term viability as a peer-to-peer payment system by making full node operation increasingly expensive.
The mandatory signaling window creates a specific failure mode. During blocks 961,632 through 963,647:
This creates two possible chains. The risk is proportional to the number of economically significant nodes running enforcing software. With an estimated 2-8% of nodes in this category and under 1% of hashrate, the minority chain would be extremely slow — potentially producing one block per several hours rather than every ten minutes. Transactions confirmed on the minority chain would not be recognized by the majority chain.
For exchanges, wallets, and payment processors, the operational question is whether any of their infrastructure runs enforcing software. The practical consensus among exchanges appears to be continued operation on Bitcoin Core's default rules.
Three scenarios for the mandatory signaling window:
Scenario 1: Quiet failure (most likely). Signaling remains below 55%. BIP-110 does not lock in. Enforcing nodes fork onto a minority chain temporarily but rejoin the main chain once the mandatory window closes (if their software handles this gracefully). The practical effect is a failed activation and a political defeat for the data-restriction camp.
Scenario 2: Disruptive minority fork (low probability). A small number of enforcing nodes and Ocean pool miners persist on the minority chain beyond the mandatory window. This creates a short-lived "BIP-110 Bitcoin" that lacks the hashrate for security and the exchange listings for liquidity. It dies within weeks or becomes a negligible altcoin.
Scenario 3: Surprise miner pivot (negligible probability). Major pools reverse course and signal support, pushing hashrate above 55%. This would trigger lock-in and activation around September 1, 2026, with the restrictions expiring approximately one year later. No evidence supports this scenario.
The next Bitcoin difficulty adjustment is estimated for August 8, 2026, with difficulty projected to decrease marginally from 126.23T to approximately 125.13T (-0.87%), per CoinWarz data. This retarget coincides almost exactly with the mandatory signaling window opening.
BIP-110 will enter its mandatory signaling window around August 7-9, 2026, with support that falls approximately 54 percentage points short of the 55% threshold required for activation. The proposal's failure was effectively determined months ago, when no major mining pool beyond Ocean committed hashrate to the effort.
The significance of BIP-110 lies not in its outcome but in what the process revealed about Bitcoin governance in 2026. A proposal authored pseudonymously, backed by less than 1% of hashrate, and opposed by Saylor, Back, and Lopp nonetheless forced the entire ecosystem to confront a fundamental question: should Bitcoin's consensus rules discriminate between transaction types based on content?
The network's answer, measured in hashrate, is no. Miners chose the revenue. The market spoke in exahashes, and it said 5 out of 940.