Bitcoin’s next protocol dispute is moving toward a critical test in early August, as Bitcoin Improvement Proposal 110, known as BIP-110, is scheduled to enter an enforcement phase despite limited public support from miners and only modest backing from node operators.
The proposal seeks to restrict non-financial data on the Bitcoin blockchain, including Ordinals-style inscriptions and NFT-like content. Supporters say the change would protect Bitcoin’s role as a monetary network by limiting arbitrary data in transactions. Critics warn that activating the rules without broad consensus could split the chain, create a competing version of Bitcoin, and increase uncertainty for traders, miners, developers and users.
Current network data show that only 15,035 of Bitcoin’s 102,674 nodes have signaled readiness to enforce BIP-110, equal to about 14.64% of the visible node network. Public miner signaling remains below 1%, far short of the level normally needed for a rule change to become dominant across the network.
The proposal’s formal activation threshold is 55%. If that threshold is not met before block height 961632, BIP-110 is designed to move into a forced activation window that runs until block height 963647. During that period, nodes running the new rules would begin rejecting blocks that do not comply with BIP-110’s restrictions. Full activation is then expected at block height 965664.
That structure has raised concerns because Bitcoin’s consensus rules depend heavily on coordination between node operators and miners. If a minority of nodes enforces new rules while most mining power continues building blocks under the existing rules, the network can split into two incompatible chains.
Such an outcome would not necessarily replace Bitcoin’s main chain. Under Bitcoin’s longest-chain and proof-of-work system, the chain backed by the majority of mining power is generally expected to remain the dominant network. If BIP-110 is enforced by a small minority, its chain could produce blocks slowly, fall behind the main chain, or survive as a separate digital asset with limited liquidity and adoption.
The issue is being closely watched because Bitcoin’s total network hash rate is currently estimated at about 764 exahashes per second. At that scale, even a small reallocation of mining power can have visible effects on block production, transaction confirmation times and market sentiment. Some independent market observers have warned that a contentious rule dispute could produce sharp short-term volatility, particularly if traders struggle to determine which chain, if any, will receive broad ecosystem support.
What BIP-110 would change
BIP-110 was introduced by Dathon Ohm in December 2025 and has been supported by developer Luke Dashjr. The proposal is aimed at reducing or preventing the use of Bitcoin transactions to carry arbitrary non-financial data.
The debate follows several years of tension over Ordinals, inscriptions and similar data-heavy uses of Bitcoin block space. These methods allow users to attach images, text, tokens and other forms of digital content to Bitcoin transactions. Supporters of inscriptions argue that if users pay the required transaction fees, they should be free to use the network’s block space. Opponents argue that Bitcoin was designed primarily for monetary transfers, not data storage, and that excessive non-payment data can crowd out standard transactions.
BIP-110 would attempt to enforce tighter limits on this kind of activity by causing participating nodes to reject blocks that include transactions violating the proposed restrictions. In practical terms, that means the proposal would not merely discourage inscriptions. It would make certain forms of transaction data invalid under the new rules, but only for nodes that choose to run software enforcing BIP-110.
That distinction is central to the current risk. Bitcoin changes normally require broad agreement among miners, node operators, wallet providers, payment processors, developers, custodians and users. Without that agreement, two groups may disagree on which blocks are valid. Once that happens, the network can divide.
Support remains limited
The available signaling data suggest BIP-110 is far from the support levels usually associated with a smooth Bitcoin protocol change.
Of more than 102,000 visible nodes, just over 15,000 have signaled readiness to enforce the new rules. That leaves the large majority either opposed, undecided, inactive on the proposal, or running software that does not include BIP-110 enforcement.
Miner backing appears even weaker. Public support from miners is below 1%, according to current signaling. Ocean, a mining pool operated by Dashjr, is the most prominent pool associated with the proposal and controls roughly 2.6% of total network computing power. Larger pools, including F2Pool, hold significantly greater shares of the network and have publicly declined to implement BIP-110.
That matters because miners determine which chain receives proof-of-work at scale. Nodes can reject blocks they consider invalid, but if only a small amount of hash power is mining under their preferred rules, their chain may advance much more slowly than the main Bitcoin chain.
For BIP-110 to become the dominant Bitcoin chain, it would likely need more than half of total mining power to enforce or follow the new rules. Without that majority, the non-BIP-110 chain would be expected to continue producing blocks at the normal pace, while the BIP-110 chain could lag behind.
Prediction markets currently assign only about a 10% probability that BIP-110 successfully activates and becomes Bitcoin’s main chain by September 2026. While prediction markets are not definitive, they reflect the broad skepticism surrounding the proposal’s chances under current conditions.
Why the dispute matters
The BIP-110 dispute is not only about inscriptions. It has become a broader argument over what Bitcoin should be allowed to do and how restrictive its base-layer rules should become.
Dashjr and other supporters of the proposal argue that Bitcoin’s purpose is to serve as a decentralized monetary system. From that perspective, large amounts of arbitrary data are seen as spam or wasteful use of scarce block space. They say tighter limits would help keep the network focused on payments and preserve access for users making ordinary transfers.
Opponents say the proposal gives too much power to those who want to decide which kinds of transactions are acceptable. They argue that Bitcoin’s neutrality depends on allowing users to transact according to the rules already embedded in the protocol, as long as they pay fees and follow consensus requirements.
Prominent figures including Adam Back, Jameson Lopp and Michael Saylor have warned that the proposal could introduce censorship concerns and reduce Bitcoin’s flexibility. Critics also say restrictions on data usage could affect more advanced functions connected to Taproot, the upgrade that expanded Bitcoin’s scripting and data capabilities. Some have raised concerns that projects such as BitVM, which seeks to bring more complex computation to Bitcoin, could face slower development if the network adopts stricter data limits.
The dispute reflects a recurring tension in Bitcoin’s history. Some participants prefer a highly conservative base layer focused almost exclusively on monetary settlement. Others support broader experimentation, provided it does not require trusted intermediaries or changes to Bitcoin’s supply rules.
Inscription activity has already dropped
One factor complicating the case for urgent action is that inscription-related activity has already fallen sharply.
Network data show that inscription-related transactions now account for about 5% of Bitcoin block space, while traditional peer-to-peer Bitcoin transactions make up more than 95%. Daily creation of digital items on the chain has dropped below 10,000 over the past month, down from a peak of roughly 400,000 in late 2023.
That decline has led some technical specialists to question whether BIP-110 would have a large immediate effect. If inscription activity is already low, they argue, then changing consensus rules may introduce more risk than benefit in the near term.
Supporters counter that the current lull does not guarantee future stability. They say inscription activity could rise again if market demand returns or if new protocols make it easier to embed large amounts of data in transactions. From that view, BIP-110 is a preventive measure rather than a reaction to the current level of activity.
The debate has also encouraged counterproposals. A free software client known as $DOG Mode was proposed by a prominent coder as a direct response to BIP-110. Instead of tightening limits, the client would push size limits up to 3.9 million weight units. That approach represents the opposite philosophy: rather than narrowing acceptable transaction use, it would allow larger data-heavy activity within the network’s block structure.
The emergence of competing software builds has increased the technical complexity of the dispute. If different groups run incompatible versions of Bitcoin software, traders and service providers may have to decide which chain they recognize, which ticker symbols to use, and how to handle deposits and withdrawals during any disruption.
How a chain split could unfold
If the forced activation window begins without enough miner support, BIP-110 nodes would start rejecting blocks that contain transactions considered invalid under the new rules. Most miners, however, could continue producing blocks under the existing Bitcoin rules.
In that scenario, two chains could emerge. One would be the existing Bitcoin chain, supported by most hash power and most existing infrastructure. The other would be a BIP-110 chain, supported only by miners and nodes enforcing the new restrictions.
The practical effect would depend on hash power. If the BIP-110 side has only a small fraction of total computing power, blocks on that chain would arrive much more slowly than Bitcoin’s expected 10-minute average. Transaction confirmations could become delayed, liquidity could be thin, and services may hesitate to support the chain.
A minority chain can still exist. Bitcoin Cash and Bitcoin SV are previous examples of networks that split from Bitcoin and continued operating under separate rules. Those networks show that splinter chains can survive technically, but they also show the difficulty of winning broad adoption after a contentious break. Over time, separate chains must establish their own mining economics, market value, developer base, exchange support, wallet support and user demand.
BIP-110 could follow several paths. It could fail to activate meaningfully if too few miners join. It could produce a slow parallel chain that remains marginal. Or it could become the basis for a new network with its own market price and identity. The least disruptive path would be a delay, withdrawal or compromise before the enforcement process creates incompatible block validation.
Market impact remains uncertain
Bitcoin traders are watching the debate because protocol disputes can cause uncertainty even when the technical outcome appears likely to favor the existing chain.
The global market has experienced large swings during previous periods of network stress, regulatory pressure, liquidity shocks and major software disputes. With the Bitcoin hash rate near 764 exahashes per second, a sudden or confusing change in mining rules could lead to rapid repricing if traders fear disruption to deposits, withdrawals or settlement finality.
Some market participants have suggested that volatility of 20% to 30% is possible if the dispute escalates into a visible chain split. That estimate is not a forecast, but it reflects concern that uncertainty over which chain holds social and economic consensus can affect short-term market behavior.
The risk is not limited to price. During a chain split, transactions broadcast on one chain may not behave the same way on another. If replay protection is absent or poorly understood, users can face operational risks when moving coins. Wallet providers and service platforms may pause activity until the situation is clearer. Miners may redirect hash power depending on profitability, ideology or technical compatibility.
For traders, the central issue is not only whether BIP-110 “wins.” It is whether the activation period causes enough uncertainty to interrupt normal market functioning.
Ecosystem response will be decisive
The next phase will depend on more than software code. Bitcoin’s social layer — miners, node operators, developers, wallet teams, payment processors, custodians, traders and users — will determine whether BIP-110 becomes a serious fork or a short-lived minority effort.
If larger mining pools continue to reject the proposal, BIP-110 is unlikely to become the main Bitcoin chain. If more nodes signal support but miners still do not follow, the proposal may produce a split without enough proof-of-work to compete effectively. If support unexpectedly rises before the key block heights, the market will need to reassess the probability of a deeper protocol shift.
For now, the numbers point to limited backing. Node support remains below 15%, miner signaling is minimal, and major pools have not moved behind the proposal. Inscription activity has also declined sharply from its peak, weakening the argument that Bitcoin faces an immediate block-space emergency.
Still, the scheduled enforcement mechanism means the dispute cannot be dismissed entirely. Automatic or forced activation designs can move a proposal into a live test even when ecosystem agreement is weak. That is why early August has become the focal point.
The enforcement period will show whether BIP-110 is a durable attempt to redefine Bitcoin’s transaction rules or a minority fork that fails to gather enough economic weight. The outcome will depend on hash power distribution, node participation, developer coordination, wallet and service provider decisions, and the willingness of the broader Bitcoin community to accept stricter limits on non-financial data.
Until then, BIP-110 stands as the latest reminder that Bitcoin’s technical rules are only part of its governance. Consensus also depends on whether enough of the network agrees that a change is worth enforcing.
Concerned about a possible Bitcoin split? Learn how to trade Bitcoin securely during protocol shifts on Toobit.
Disclaimer: The content on this page is provided for general informational purposes only and does not represent the views or financial advice of Toobit. We make no guarantees regarding the accuracy or completeness of this information and shall not be held liable for any errors, omissions, or outcomes resulting from its use. Investing in digital assets involves risk; users should independently evaluate their financial situation and the risks involved. For further details, please consult our Terms of Service and Risk Disclosure.
