Key conclusions
- The BIP 110 proposal currently has zero support from the largest mining pools, which puts a question mark over its August activation.
- Michael Saylor and Adam Back officially criticized the proposal, warning against a dangerous precedent of interference with the rules of consensus.
- If a minority of nodes running Bitcoin Knots implements the changes, there is a risk of a permanent split in the network and the creation of an alternative chain.
The controversial technical proposal known as BIP 110, which seeks to introduce an annual cap on non-financial data on the blockchain, is heading to a critical decision point without support from the mining sector. Signaling for this solution from miners is currently 0% in the current settlement period. Data from network monitor indicates that none of the leading mining pools, including Bitmine or Foundry, have run code to support these changes. This situation is causing a huge stir on social media, exposing the deep division between activists and entities maintaining the infrastructure.
The architecture of BIP 110 and the technical basis of the dispute
At the core of the conflict is a dispute over the definition and purpose of space in Bitcoin network blocks. Currently, transactions can carry both value transfers and additional information using the OP_RETURN function and special scripts in the witness data structure. The BIP 110 protocol assumes reduced limits for these functions for a period of 12 months. The new rules would block most data packets exceeding 256 bytes, which directly affects protocols such as Ordinals and Inscriptions, used to save graphic files and metadata.
Supporters of this solution argue that excess non-financial data burdens nodes and increases operating costs for entities storing full transaction history. From the perspective of developers supporting the changes, Bitcoin should only function as a payment system, not a distributed database. However, opponents point out that top-down decisions about which transactions are correct violate the foundations of the free market.
Criticism of BIP 110. Saylor and Back’s position
Blockstream co-founder Adam Back took a similar stance. He sent a direct message to supporters of the update, indicating that the Bitcoin network was rejecting these requests. Back suggested that the group supporting the restrictions has the right to create its own fork and disconnect from the main chain, but the original network will not accept these modifications.
Split scenario and August deadline
The project does not use the traditional activation path, which requires 95% support from miners. Instead, the creators opted for the UASF mechanism, i.e. a soft fork activated by users, lowering the signaling threshold to 55%. The software implementation in the current phase is almost exclusively carried out by operators using the alternative Bitcoin Knots client, while the dominant Bitcoin Core does not contain this code.
The current signaling cycle covers blocks from 957,600 to 959,615. The deadline for voluntary rule blocking falls on block 961,542, which, according to network forecasts, will occur in early August. If by then Knots nodes begin to unconditionally reject blocks that do not meet the criteria and miners ignore these guidelines, the network will split. As a result, the BIP 110 software will disconnect from the main chain, creating a minority network that will be rejected by nodes running the standard Bitcoin Core software.
