Foundry USA has asked its Bitcoin mining clients to say whether they support Bitcoin Improvement Proposal 110, a contentious soft-fork proposal that would restrict the amount of arbitrary, non-financial data that can be included in Bitcoin transactions.
The request places one of the world’s largest mining pools at the center of a growing debate over what belongs on Bitcoin’s base layer. Foundry USA currently controls about 23.8% of the Bitcoin network’s hashrate, according to Hashrate Index, giving its eventual signaling decision significant weight in the broader activation discussion.
The pool opened a voting window for clients that is scheduled to close at block 961,632, which is expected in early August. Foundry said it sent educational materials to participating miners so they could review the proposal before casting a response. Clients can vote through a unique link sent by email, and the pool will use the collected results to decide how it will signal on-chain regarding BIP-110.
The proposal has become one of the most closely watched Bitcoin governance disputes of the year because it touches a core question that has followed the network for years: should Bitcoin’s main chain be used almost exclusively for monetary transactions, or should users also be able to store broader forms of data if they are willing to pay the required fees?
What BIP-110 would change
BIP-110 aims to reduce the maximum amount of arbitrary data that can be embedded in Bitcoin transactions. Supporters describe the measure as a way to protect Bitcoin’s monetary function, prevent excessive blockchain bloat and limit use cases that they believe place unnecessary strain on the network.
The change would be implemented through a soft fork, meaning upgraded nodes would enforce stricter rules while older nodes would remain technically compatible with the chain if activation proceeds smoothly. In practice, however, any soft fork involving contested transaction rules can become sensitive if miners, node operators and users disagree on enforcement.
The proposal is widely viewed as a direct response to the rise of Ordinals and related data-heavy activity on Bitcoin. Ordinals allow users to attach data such as images, text and other files to individual satoshis, the smallest units of Bitcoin. The system has generated new fee revenue for miners and created an active market for Bitcoin-based digital collectibles, but it has also drawn criticism from users who argue that the activity drives up block space demand and shifts Bitcoin away from its original peer-to-peer cash and store-of-value functions.
BIP-110 would not remove previously stored data from the blockchain. Instead, it would restrict future transaction formats by lowering the ceiling on certain categories of non-financial data. That distinction matters because Bitcoin’s blockchain is append-only. Once data has been confirmed in historical blocks, it remains part of the permanent record unless the entire network reorganizes history, which is not considered practical under normal conditions.
A major mining pool enters the debate
Foundry USA’s vote does not automatically decide the outcome of BIP-110, but it gives the proposal a highly visible test among miners who contribute a major share of Bitcoin’s total computing power.
Mining pools coordinate block production for many independent miners. While a pool operator manages block templates, payouts and signaling, the underlying hashrate comes from clients that may have differing views on protocol changes. By polling clients directly, Foundry is trying to establish whether its signaling position reflects the preferences of the miners that use its services.
That approach may also reduce pressure on the pool operator. If Foundry were to signal support or opposition without consulting clients, it could face criticism from miners who disagree with the decision. A formal voting process creates a clearer record of client sentiment, even if it does not eliminate controversy.
The voting period is tied to block height rather than a calendar date. Bitcoin blocks are found roughly every 10 minutes on average, but actual timing can vary. Based on current estimates, block 961,632 is expected around early August. Once that block is reached and voting closes, Foundry is expected to review responses and determine how to represent its clients’ position in on-chain signaling.
Why the activation threshold matters
The debate around BIP-110 has intensified because the activation process described by supporters requires broad miner backing before the new rule can take effect. Figures circulating among market participants suggest the proposal would need about 55% “yes” support to move forward, while recent public tracking has shown only a very small share of active miners signaling in favor, around 0.86%.
Those numbers could change quickly if large pools take formal positions. Foundry’s share of hashrate means its decision could materially shift the visible level of support. Other major pools may also face pressure to clarify their stance as the deadline approaches.
Still, miner signaling is only one part of Bitcoin governance. Node operators, developers, businesses, wallet providers and users all influence whether a rule change has practical legitimacy. Bitcoin has no central authority that can simply order a protocol change. Even when miners signal support, users running nodes decide which rules their software enforces.
That is why contested soft forks can be politically and technically complex. If support is broad, activation can appear orderly. If support is fragmented, the risk of confusion rises. The most serious concern is that one group enforces the new rules while another continues producing or accepting blocks that the upgraded group considers invalid.
Technical concerns grow
BIP-110 has drawn criticism from developers and long-time Bitcoin figures who argue that filtering transaction data at the protocol level could create unintended consequences.
Opponents say the proposal may be too blunt, potentially affecting transaction types that are not related to Ordinals or other controversial data uses. Some developers have warned that placing stricter limits on arbitrary data could reduce Bitcoin’s future flexibility, making it harder to build legitimate tools that rely on unconventional transaction formats.
Critics also say the policy raises a philosophical concern. If the network begins restricting certain forms of paid block space usage because some users dislike them, the precedent could be used later to target other transaction types. High-profile Bitcoin advocates including Michael Saylor and Adam Back have previously expressed concern about protocol-level filtering, arguing that valid transactions should not be excluded merely because their purpose is unpopular.
Supporters reject the idea that the proposal is censorship. They argue that Bitcoin already has consensus rules, standardness policies and technical limits, and that adjusting those limits is part of maintaining a healthy protocol. In their view, arbitrary data storage is an inefficient use of block space that imposes long-term costs on all node operators while benefiting a narrower set of users.
The disagreement is not only technical. It reflects a deeper divide between those who see Bitcoin as a narrowly optimized monetary network and those who see its permissionless block space as open to any valid use that pays the market fee.
Chain split fears remain low but not zero
The most serious scenario discussed by traders and developers is a chain split, although such an outcome would depend on how activation is handled and how much support the proposal gains.
In a soft fork, upgraded nodes reject blocks that violate the new rule, while non-upgraded nodes may still see those blocks as valid. If most miners enforce the new rule, blocks violating it would likely be orphaned and the network would converge on the stricter chain. If enforcement is weak or divided, incompatible blocks could create temporary disruption, stale blocks or deeper disagreement over which chain represents Bitcoin.
Some critics have warned that if the code begins enforcing the restriction around block 961,632 without strong consensus, nodes could start rejecting blocks that other participants consider normal. That could increase the chance of a split between rule sets, especially if economically important users and miners are not aligned.
Bitcoin has faced major governance disputes before, most notably during the block-size conflict that culminated in the 2017 creation of Bitcoin Cash. That episode left a lasting memory across the community. Many users remain cautious about any proposal that appears to divide miners, developers and businesses into competing camps.
For now, public support for BIP-110 appears limited. But the Foundry vote has raised the stakes because a single large pool’s position can influence perceptions of momentum. If Foundry’s clients strongly reject the proposal, the effort may lose force. If they back it, other pools could face renewed pressure to respond.
Market reaction focuses on uncertainty
Bitcoin traders are watching the vote because protocol disputes can add uncertainty to an already volatile market. While the proposal is technical, its effects could become financial if it changes miner behavior, raises fears of a chain split or disrupts confidence in near-term network stability.
Bitcoin has recently found support in the $63,700 to $65,000 area, a zone that traders have treated as an important near-term floor. A sustained move below $64,000 could weaken sentiment and draw attention to lower technical levels, including the $57,000 region, which some market watchers view as the next major area of potential support.
The connection between BIP-110 and price action is not direct. Bitcoin often moves because of broader liquidity conditions, macroeconomic expectations, ETF flows, miner treasury activity and derivatives positioning. But contentious protocol debates can add an extra risk premium, especially when traders are already sensitive to sharp swings.
A rapid increase in “yes” signaling from large mining pools could trigger concern that the proposal is closer to activation than previously expected. That does not mean prices would automatically fall, but it could increase volatility if traders begin to price in a higher chance of technical disruption or community division.
On the other hand, if major pools show little support, the market may treat the proposal as a contained governance dispute rather than an imminent protocol event. In that case, price action would likely return to broader drivers, including interest-rate expectations, ETF demand and overall risk appetite.
Custody questions resurface
The debate has also revived discussion around custody during contentious network events. When a protocol split is considered possible, some market participants reassess how their Bitcoin is held and what claims they would have if two competing chains emerged.
Self-custody through hardware wallets gives users direct control over private keys, but it also requires careful operational security. Custodial platforms can simplify access and trading, but users depend on those firms’ policies if a fork or chain split creates competing assets. In previous network splits across the crypto market, custodians have varied in how quickly they recognized, credited or supported forked coins.
For most Bitcoin users, the immediate issue is not panic but preparation. Understanding custody arrangements, withdrawal policies and wallet compatibility can reduce confusion if the governance debate becomes more serious.
A test of Bitcoin’s social layer
The Foundry vote highlights a central feature of Bitcoin: protocol changes are not decided only by code. They are decided through a messy interaction between software, miners, businesses, developers and users who may disagree sharply but still share an interest in keeping the network credible.
BIP-110 is framed by its supporters as a defense of Bitcoin’s core purpose. It is framed by opponents as an unnecessary restriction that could weaken neutrality and create avoidable technical risk. Both sides argue that they are protecting Bitcoin’s long-term health, but they define that health differently.
As the voting deadline approaches, the key signals will be the response from Foundry’s clients, any follow-up positions from other major mining pools and whether developers can address concerns about unintended effects. Until then, BIP-110 is likely to remain a focal point for Bitcoin’s broader debate over block space, neutrality and governance.
The outcome may not be known immediately after Foundry’s voting window closes. But the process has already shown that even after years of growth, Bitcoin’s most important rule changes still depend on rough consensus rather than simple control by any one company, mining pool or developer group.
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