Key conclusions
- The Bitcoin Knots team announced a plan to change the proof-of-work algorithm after the minority chain enforcing the BIP-110 standard stalled at block 961,633.
- The main chain of the Bitcoin network is operating without interruption, and the dispute concerns only a branch supported by approximately 2.5% of computing power.
- Luke Dashjr has lost his editor privileges on the official Bitcoin documentation repository due to a conflict of interest in pushing a new rule.
The Bitcoin Knots software development team has set August 11, 2026 at 14:00 UTC as the moment to select a new proof-of-work algorithm for the network branch enforcing the correctness of the BIP-110 proposal. The decision was made after the complete paralysis of the minority chain, which after the split generated only two blocks and stopped processing transactions.
Conflict over consensus rules and the BIP-110 fiasco
The problem concerns a branch that disconnected from the main network on block 961 632. Developers supporting BIP-110 wanted to impose stricter filtering of transactions entering data into blocks. However, most miners ignored the signaling requirements, leading to a situation where the minority chain had only 2.5% of the total computing power of the Bitcoin network.
The main Bitcoin network continued to operate without any delays, reaching block 961,865 at the same time. However, the Bitcoin Knots team published a message claiming that the entire network was under attack, which was met with an immediate response from the community in the form of a note correcting these reports.
The threat narrative introduced in the statement was intended to justify an immediate change in the mining algorithm.
Developers told users to run the latest version of the software client and add the command maxtipage=2592000 to configuration files. To ensure transparency in the selection of the new algorithm from the submitted proposals, a special cryptographic hash was previously published. It is intended as proof that the choice of procedure was not manipulated by the creators themselves.
Division in the community around BIP-110
The situation revealed a deep rift between leading figures involved in the development of the ecosystem. Adam Back publicly assessed that the BIP-110 project did not have the required economic consensus from the beginning and was rejected by the market.
Luke Dashjr disagreed with this assessment. He declared that there is only one real Bitcoin network, which has just activated new rules, and the algorithm change is intended to eliminate miners sabotaging the reform.
The developer’s radical actions brought immediate organizational consequences. Luke Dashjr was removed as editor of the official Bitcoin Improvement Proposals repository the same week due to a conflict of interest.
Market reaction and miners’ attitude
Information chaos translated into unstable decisions of mining entities. The Roughnecks pool, responsible for mining the block in the branch supporting the new rule, first announced a halt to work, only to announce a return to mining at the stopped top of the chain using Knots-RDTS software the next day.
Market experts, including Trey Sellers, pointed out the complete unprofitability of such activities. Block mining rewards require 100 confirmations to be released, while the experimental chain generated at most one block per day. Representatives of Roughnecks only replied that they do not provide financial consulting services, and miners must take into account the lack of any income.
The BTC price itself remained almost indifferent to the events surrounding the Knots software. The rate remained around USD 64,000 with a decline of just over 1% during the day. The quotations are approximately 47% below the level from the same period last year, which confirms that investors treat the situation only as an unsuccessful attempt to impose changes by a small part of the community.
