A Bitcoin Civil War in the Undercurrents: BIP-110 Raises Forking Concerns

The forced activation path of BIP-110 and potential parallel forks may turn a technical disagreement into a real risk of blockchain split.

Written by: Ashrith Rao

Compiled by: Chopper, Foresight News

Bitcoin should not have to face both a market downturn and an internal ideological conflict simultaneously. However, currently, two troubles have come knocking.

Since the release of version 30 of the Bitcoin Core client in October 2025, a philosophical disagreement has been brewing; meanwhile, the crypto market is trying to find a price bottom amidst this dispute.

BIP-110: Countdown to Bitcoin Fork Confrontation

The critical deadline for this game is set for August 7, 2026, corresponding to block height 961632. Everything that happens then may determine whether Bitcoin continues on a single main chain or splits into two chains.

In December 2025, developer Dathon Ohm proposed BIP-110 (Note: BIP stands for Bitcoin Improvement Proposal), which aims to "reduce data temporary soft forks." This is a soft fork proposal with a one-year validity period.

The proposal focuses on data control within blocks and does not carry political demands: within about a year, it aims to limit OP_RETURN (Note: OP_RETURN is a script used in Bitcoin transactions to write additional data) output data to 83 bytes; the limit for most new output scripts is set to 34 bytes; and it imposes constraints on several technologies that carry external data, including large data pushes, witness items, and certain unspecified witness versions.

Historical data already stored on the blockchain will not be cleared; the rules only constrain future new transactions. The controversy centers on inscriptions and various non-financial data that have occupied Bitcoin block space since 2022.

Proponents of the proposal argue that such applications deviate from Bitcoin's original positioning as a payment and settlement system, increasing the costs of running full nodes and continuously expanding the scale of unspent transaction outputs (UTXO).

The real point of contention is the activation mechanism of the proposal. BIP-110 relies on the bit-4 signaling mechanism and has designed a market-driven, smoothly locked activation path: within a difficulty cycle of 2016 blocks, it needs to gain 55% hash power voting support.

Since monitoring began on December 1, 2025, the voting power for the proposal has remained low, only hovering between 0.3% and 0.4%. The latest observed data shows a minimum of 0% and a maximum of only 0.86%. If the regular voting channel fails to meet the standard, the proposal will initiate a forced execution plan: it will be enforced at block height 961632.

By this time, regardless of the attitude of the majority hash power across the network, nodes running compatible BIP-110 clients (mainly Bitcoin Knots) will begin to reject blocks that do not support the rule.

Critics argue that this strategy, which mimics the UASF (User Activated Soft Fork) of 2017, escalates what appears to be a minor technical discussion into a significant governance dispute.

Current Hash Power Data

Currently, the total hash power of the Bitcoin network is about 940 EH/s, while the voting hash power for BIP-110 is less than 1%, at about 5 EH/s. Most of the observable voting blocks come from the mining company Ocean, which has connections to Jack Mallers and Adam Back.

The vast majority of Bitcoin hash power holders either remain indifferent or explicitly oppose the proposal. The significant gap in hash power support highlights that once BIP-110 initiates a forced path, the potential consequences cannot be underestimated.

When a minority of nodes forcibly implement a set of rules that the vast majority of hash power and nodes refuse to recognize, it will not lead to the rules being established but rather to the emergence of two legally distinct blockchains. Both chains will recognize blocks that comply with BIP-110's strict rules; however, non-BIP-110 nodes can accept blocks that do not meet the restrictive conditions, while BIP-110 nodes will directly reject them.

The current price of BCH is only a fraction of BTC, which is the most intuitive example of how the market views a forked chain lacking sufficient hash power support.

Positions Become Clearer

As the deadline approaches, the opposing camp's strength is not diminishing but rather increasing.

On July 18, Michael Saylor published a lengthy article titled "110 Reasons Against BIP-110," launching a fierce critique. He argued that the Bitcoin consensus layer should not define the "reasonable use" of transaction fees. Rather than the proliferation of junk transactions, he is more concerned about the precedent risk. Once consensus rules begin to distinguish between "compliant transactions" and "non-compliant transactions," this paradigm could become permanently entrenched and potentially abused by those manipulating rule iterations in the future.

He also pointed out that BIP-110 would limit future upgrade space; for example, contract solutions like BitVM that rely on data flexibility would be constrained by the proposal.

Adam Back and Jameson Lopp also expressed similar but independent views: this activation mechanism is inherently risky. Successful past Bitcoin upgrades, such as SegWit and Taproot, received over 90% hash power support before their official implementation. In contrast, the 55% threshold is already low. Currently, with natural voting support below 1%, forcing activation will only create divisions rather than achieve consensus.

Many practitioners have chosen to remain neutral. Jimmy Song publicly stated, "I do not understand this mechanism well enough to judge the consequences of each path," which drew considerable criticism. In this intense debate, a neutral stance is seen by many as avoiding a position.

On the other hand, developers of Bitcoin Knots and supporters of BIP-110 pointed out the changes in the Core v30 version released in October 2025: the default relay strategy limit for OP_RETURN was significantly raised from 83 bytes to about 100,000 bytes, an increase of over 1200 times.

The Core team defines this as a relay strategy adjustment rather than a consensus rule change, arguing that relying on relay filtering cannot eliminate junk data, as external data can be embedded in ordinary transaction outputs in forms like hashes, making it difficult to distinguish and intercept.

From a technical perspective, this viewpoint holds. Relying on the relay layer cannot completely prohibit arbitrary data storage. This is also the core argument of BIP-110 opponents, that the proposal addresses symptoms rather than root causes, making it difficult to eradicate the problem and potentially causing a blockchain split in the process of attempting to fix it.

It was precisely the lack of broad community communication surrounding the v30 version update that led to the emergence of the Bitcoin Knots branch; months later, BIP-110 was born as a response.

The Second Risk Point: Sztorc Proposes eCash Hard Fork

In addition to BIP-110, the market will also face another variable in August. Concurrently with BIP-110, Paul Sztorc, the proposer of the Drivechain proposal (BIP 300/301), announced plans to initiate an independent hard fork, targeting block height 964000.

This plan will create a new SHA-256d public chain, initially identical to Bitcoin. After the fork is initiated, the network difficulty will be readjusted; at the fork block, all BTC holders will receive an equivalent amount of new forked assets.

Unlike BIP-110, this fork does not impose data restrictions, with the core goal of promoting expansion and sidechains, implementing sidechain expansion solutions that have long been delayed from going live on the mainnet.

The two fork events are independently initiated but will create a cumulative risk effect. Before and after the forced signaling cycle begins, exchanges, custodians, wallet service providers, and institutional holders will need to synchronize their decisions on whether to support BIP-110 while also dealing with the 1:1 distribution of forked tokens. The two do not have a coordinated arrangement; it is merely a coincidence in timing, yet it will bring immense pressure to the entire industry within three weeks.

Market Impact

Since reaching a peak in October 2025, Bitcoin is currently in a phase of building a bottom. Although some institutions continue to accumulate during the downturn, the BlackRock IBIT Bitcoin ETF saw significant capital outflows in June.

The market is already digesting a macro-level repricing, with governance disputes and potential forking tail risks following closely; if this were at a bull market peak, such risks might be easily overlooked, but the current environment amplifies panic.

The prediction market has not yet viewed BIP-110 as an independent, highly liquid binary major event. Polymarket's Bitcoin price contracts in mid to late July show that traders generally expect Bitcoin prices to remain in the range of $50,000 to $60,000 in early August.

This also corroborates the hash power data: if hash power voting remains below 1% three weeks in advance, BIP-110 is unlikely to be locked in through regular channels.

The most direct suspense lies in whether the nodes of the Bitcoin Knots camp will still insist on a forced strategy after the regular activation path fails. The final decision-making power is not controlled by market forces but lies in the hands of a small number of client maintainers.

Once the forced path is implemented, the market may react in a predictable manner: the original chain, which has the support of the vast majority of miners and exchanges, is likely to become the core of liquidity, hash power, and price pricing.

"The market will ultimately resolve the dispute" and "the market resolves disputes without cost" are two completely different propositions.

Chain forks will create numerous short-term troubles: replay attack risks, chaotic exchange listing rules, uncertainty over custodial asset ownership, and risk premiums (reflected in widening bid-ask spreads and shrinking order depth). In an environment where market confidence is already weak, the impact will be even more pronounced.

On August 7, the market will face a severe test: can Bitcoin truly shake off the shadow of the governance crisis of 2017?