Bitcoin's most contentious governance episode since the 2017 block-size wars concluded in under 48 hours. BIP-110, the Reduced Data Temporary Softfork designed to restrict Ordinals, BRC-20, and Runes data from Bitcoin transactions, entered its mandatory signaling window at block 961,632 on August...
"Bitcoin's strength is not that everyone agrees on every use. Its strength is that disagreement is contained by neutral rules and hard consensus." — Michael Saylor, Executive Chairman, Strategy (formerly MicroStrategy)
Bitcoin's most contentious governance episode since the 2017 block-size wars concluded in under 48 hours. BIP-110, the Reduced Data Temporary Softfork designed to restrict Ordinals, BRC-20, and Runes data from Bitcoin transactions, entered its mandatory signaling window at block 961,632 on August 7, 2026. It attracted 2.53% miner support against a 55% activation threshold. The minority chain produced two blocks before stalling. The main chain advanced more than 200 blocks ahead in the same period.
The fallout was immediate. OCEAN, the mining pool that anchored the effort, lost 96.5% of its hashrate within 24 hours after routing customer hashpower to the minority chain without explicit consent. Lead proponent Luke Dashjr was removed as a BIP editor by peer vote on August 10. BIP-110 is now marked Closed in the Bitcoin Improvement Proposals repository. The episode resolved a multi-month governance standoff but raised questions about mining pool accountability, the role of inscription-driven fee revenue, and the boundaries of Bitcoin's social consensus process.
BIP-110, formally titled "Temporarily Limit Arbitrary Data in Bitcoin," comprised seven consensus rules that would have restricted non-financial data in Bitcoin transactions for a one-year trial period. The core constraints:
The targets were specific: Ordinals inscriptions, BRC-20 token minting, and Runes protocol payloads — all of which embed arbitrary data into Bitcoin transactions using witness space introduced by the 2017 SegWit upgrade. Supporters, led by Bitcoin Core developer Luke Dashjr and users of his Bitcoin Knots client, argued these uses constitute spam that bloats the blockchain, inflates transaction fees for ordinary users, and imposes storage costs on full-node operators that serve no monetary purpose.
The proposal was credited to pseudonymous author "Dathon Ohm," though Dashjr was widely identified as the driving force. It reached Complete status in the BIPs repository on June 25, 2026, setting up the August showdown.
| Date | Event | |------|-------| | March 1, 2026 | Barefoot Mining, operating through OCEAN pool, mines first BIP-110 signaling block | | June 25, 2026 | BIP-110 reaches Complete status in BIPs repository | | July 2026 | Michael Saylor publishes 110-point essay opposing BIP-110 | | Late July 2026 | F2Pool and all other major pools publicly refuse to signal | | August 1, 2026 | Saylor calls 55% threshold "mathematically unreachable"; says <1% of Bitcoin's economic weight supports BIP-110 | | August 7, 2026 | Mandatory signaling window opens at block 961,632. Only 51 of 2,016 blocks (2.53%) had signaled in prior difficulty period | | August 7-8, 2026 | BIP-110 nodes reject non-signaling blocks; minority chain forks at block 961,632. OCEAN miner produces first minority-chain block; AntPool mines first main-chain block | | August 8, 2026 (8 hours later) | Minority chain at block 961,633 (2 blocks). Main chain at block 961,681 (49+ blocks ahead) | | August 9, 2026 | Roughnecks, the mining group behind the two minority-chain blocks, quits BIP-110 mining. OCEAN hashrate collapses from ~36 EH/s to ~1.25 EH/s | | August 10, 2026 | Luke Dashjr removed as BIP editor by peer vote. Dashjr announces BLAKE2b as new PoW algorithm for BIP-110 chain | | August 10+ | Main chain advances 200+ blocks ahead. Minority chain frozen. BIP-110 marked Closed |
The numbers tell the story unambiguously.
Network hashrate at fork time: ~949 EH/s (per CoinWarz data as of mid-August 2026)
BIP-110 signaling hashrate: ~5 EH/s pre-fork, or approximately 0.5% of total network capacity
Blocks produced on minority chain: 2 (blocks 961,632 and 961,633)
Blocks produced on main chain in same period: 49+ within the first 8 hours; 200+ within 48 hours
Difficulty problem: The minority chain inherited Bitcoin's full mining difficulty — calibrated for ~949 EH/s — while operating with less than 5 EH/s. At that hashrate, the next difficulty adjustment was estimated to be approximately 350 days away, rendering the chain operationally inert.
Replay attack risk: BIP-110 included no replay protection. Transactions signed on one chain were valid on both, meaning holders who attempted to sell forked coins risked losing real BTC on the main chain. Bitcoin developer Kevin Loaec issued a public warning that large holders would be particularly attractive targets. No confirmed losses from replay attacks were reported as of August 10.
The most consequential fallout centered on OCEAN, the mining pool co-founded by Dashjr that served as BIP-110's operational base.
Pre-fork hashrate: ~36 EH/s (August 8) Post-fork hashrate: ~1.25 EH/s (August 9) Decline: 96.5% within 24 hours
The trigger: OCEAN routed customer hashrate to the BIP-110 minority chain for approximately 18 hours without clear miner consent. Affected miners believed they were using standard Stratum templates but were instead producing blocks on the forked chain. OCEAN committed to refunding approximately 0.3 BTC to affected miners.
The incident prompted calls for leadership removal. An open letter from miners demanded the ousting of OCEAN's leadership. Blockstream CEO Adam Back described the hashrate redirection as "unacceptable" and demanded that financial losses be deducted directly from Dashjr's salary.
Roughnecks, the mining operation that produced the minority chain's only two blocks, publicly quit BIP-110 mining on August 9, stating that the effort was no longer viable.
Rather than accept defeat, BIP-110 backers announced a pivot that transformed the soft fork into a hard fork. Dashjr confirmed BLAKE2b as the new proof-of-work algorithm for the BIP-110 chain, selected via a random-selection method.
The implications were stark:
The algorithm change effectively reclassified the BIP-110 chain from a Bitcoin soft fork into a separate cryptocurrency. As of publication, the BLAKE2b chain has no reported economic activity, exchange listings, or meaningful hashrate.
The economic argument against BIP-110 was straightforward: Ordinals, BRC-20, and Runes generate fee revenue that miners need.
Bitcoin's block subsidy halved to 3.125 BTC in April 2024. After the next halving (expected 2028), it drops to 1.5625 BTC. Transaction fees are becoming a progressively larger share of miner income.
During peak inscription activity, fees have constituted more than 30% of total miner revenue — reaching over 60% in some months during 2024 and 2025, according to on-chain data. While inscription activity has normalized from its 2024 peaks, Runes trading on platforms like Magic Eden and OKX continues to generate tens of millions in daily volume during normal weeks, with spikes during major Bitcoin price movements.
The fee contribution is not trivial. Restricting inscription data for one year, as BIP-110 proposed, would have removed a material revenue stream at a time when the security budget discussion — whether transaction fees alone can sustain Bitcoin's mining security post-subsidy — remains unresolved.
This economic reality explains the mining industry's near-unanimous rejection of BIP-110. Major pools including F2Pool, AntPool, Foundry USA, and ViaBTC — collectively representing approximately 80%+ of network hashrate — either explicitly refused to signal or remained silent, which effectively constituted opposition.
Michael Saylor (Strategy): Published a 110-point essay opposing BIP-110 in July 2026. Core argument: soft forks should be reserved for "clear, severe, and broadly understood" failures such as inflation bugs, signature validation errors, or double-spending. Classified BIP-110 as an attempt to regulate transaction usage, which he considered an attack on protocol neutrality. On August 1, stated that less than 1% of Bitcoin's economic weight supported the proposal.
Adam Back (Blockstream CEO): Opposed BIP-110 and sharply criticized OCEAN's hashrate redirection. Demanded financial accountability from Dashjr personally.
F2Pool: One of Bitcoin's largest mining pools by hashrate, publicly refused to signal BIP-110 prior to the August deadline.
Bitcoin Core developers: Removed Dashjr as BIP editor on August 10 via peer vote, citing conflict of interest and inconsistent editorial actions — specifically, using his editor authority to prematurely assign a number to BIP-110, bypassing standard discussion processes.
BIP-110's failure resolves one question while raising others.
Resolved: Bitcoin's consensus mechanism works as designed. A minority faction — even one led by a senior Core developer — cannot override the economic majority. The 55% threshold was never remotely approached. The network's incentive structure, where miners follow fee revenue, acted as a natural check against value-destructive protocol changes.
Unresolved:
Mining pool accountability: OCEAN's hashrate redirection exposed a structural vulnerability. Pool operators control Stratum template construction. Individual miners delegating hashpower to pools have limited real-time visibility into what their hardware is mining. No formal governance framework exists to prevent similar incidents.
The security budget question: BIP-110 supporters correctly identified a real issue — non-financial data consumes block space. But their proposed solution would have reduced fee revenue without addressing the underlying question of how Bitcoin sustains its security budget as subsidies decline. The inscription economy, however messy, currently contributes to that budget.
Fork escalation norms: The pivot from soft fork to PoW hard fork was unprecedented in modern Bitcoin governance. It established a template — rejected by the network but technically executed — for minority factions to attempt chain splits by changing the mining algorithm. Whether this template gets reused in future disputes remains to be seen.
Editorial process integrity: Dashjr's removal as BIP editor signals that the Bitcoin development community will enforce editorial neutrality, even against long-tenured contributors. The precedent strengthens process norms but also highlights how much of Bitcoin's governance relies on informal social enforcement rather than codified rules.
BIP-110 was the most significant test of Bitcoin's governance since the SegWit2x dispute in 2017. It ended faster and more decisively. The proposal's rapid collapse — from mandatory signaling to a frozen two-block chain within 48 hours — demonstrated that Bitcoin's economic consensus mechanism provides a robust defense against minority-driven protocol changes, regardless of the technical credentials of proponents.
The collateral damage was concentrated. OCEAN's hashrate collapse and Dashjr's removal as BIP editor represent real costs borne by the proposal's backers. The 0.3 BTC in refunds to affected OCEAN miners is a nominal figure, but the reputational damage to the pool is likely permanent in its current form.
The broader lesson is economic. Inscription traffic generates fee revenue. Miners follow fee revenue. Any proposal that threatens that revenue without a credible alternative income source will face structural opposition from the parties whose consent is required for activation. BIP-110's failure was not primarily ideological — it was arithmetic.