BIP110: Bitcoin’s Latest Crisis

Bitcoin investors are on track to receive at least one unexpected cryptocurrency airdrop this summer, triggered by a definitive hard fork arriving in early August alongside a separate, highly contentious soft fork attempt that seems bound for a similar split. While neither is expected to threaten the dominance of the main Bitcoin network, they represent the most significant attempts in years to clone Bitcoin’s ledger and spawn entirely new digital assets based on its existing ownership records.

When a development faction forces a fork without widespread industry consensus, it effectively duplicates the blockchain. This process creates a brand-new cryptocurrency that inherits Bitcoin’s historical snapshot, giving every holder a matching balance of the new asset on day one.

For creators, it is a shortcut to piggyback on Bitcoin’s massive, pre-existing user base rather than bootstrapping a community from thin air.

For investors, however, history suggests these airdropped spin-offs rarely hold long-term appeal, most are quickly liquidated for more bitcoin or simply left to gather digital dust.

For many, Bitcoin is on the verge of its most explosive governance crisis in nearly a decade. At the center of the storm is BIP-110 (Bitcoin Improvement Proposal 110), a proposal designed to purge the blockchain of JPEG images, alternative tokens, and data “spam.”

What started as a technical debate over transaction data has escalated into an ideological civil war. With a critical activation deadline loomingly set for early August 2026 (at block height 961,632), the network faces a high-stakes game of chicken that could split Bitcoin into two competing, incompatible blockchains.

The Origin: How We Got Here

The seeds of BIP-110 were sown in 2023 when developers figured out how to use Bitcoin’s SegWit and Taproot upgrades to embed arbitrary data directly into the blockchain. This birthed Ordinals (Bitcoin NFTs), Inscriptions, and Runes (fungible tokens).

Suddenly, Bitcoin wasn’t just being used to send money; people were uploading everything from digital art to clones of Doom onto the base layer. This data boom caused network congestion, driving transaction fees to historic highs and filling up the hard drives of regular node operators.

Enter Dathon Ohm, who formally introduced BIP-110 as a temporary, one-year soft fork designed to curb this behavior.

The Technical Dragnets

BIP-110 introduces 7 strict new validation rules to choke out data-heavy operations:

Limiting transaction outputs to a restrictive 34 bytes.
**Capping OP_RETURN** (a field typically used to attach data to transactions) to 83 bytes.
Banning specific opcodes (data-push functions) that Ordinals protocols rely on to function.

The Key Players: Factions at War

The ecosystem has fractured into two deeply entrenched camps, turning social platforms like X (formerly Twitter) and Nostr into technical battlegrounds.

1. The Supporters: “The Purists”

Conservative node operators, core developers, and a dedicated subset of maximalists. Notable entities include boutique mining/infrastructure firms like Sazmining, who have actively supported the proposal and given clients tools to signal for it.

They view Bitcoin strictly as a peer-to-peer electronic cash and settlement layer. To them, putting digital cats and meme tokens on the base layer is an abusive “spam attack” that drives up fees, prices out the poor, and causes “node bloat” (making it too expensive for regular people to run a home node).

Pro-BIP-110 accounts frequently pitch the fork as a righteous crusade. Public posts from supporters emphasize “saving Bitcoin from scammers” and drawing parallels to the historic 2017 Blocksize War, claiming that users, not miners, should dictate protocol rules.

2. The Opposers: “The Pragmatists and Innovators”

Mining conglomerates, exchanges, Ordinals developers, and seasoned network architects. A prominent vocal critic leading the opposition is cypherpunk and Casa co-founder Jameson Lopp.

Critics argue that the cure is far more dangerous than the disease. Bitcoin’s greatest feature is its *predictability* and *censorship resistance*. If a user pays the required market fee, their transaction should be valid. Subjectively labeling certain data as “spam” opens a dangerous door to future censorship.

Opponents have blasted the movement as an emotional, cult-like faction. In an influential piece titled “A Layman’s Guide to BIP-110”, Jameson Lopp highlighted that much of the online pro-BIP-110 noise is driven by unmasked AI bots. He noted:

“The proposal ignores Bitcoin’s decentralized governance: changes need broad buy-in, not node-counting games… BIP-110 is a reckless gamble that prioritizes short-term ‘purity’ over Bitcoin’s long-term resilience.”

The True Danger: The Low-Threshold Chain Split

What makes BIP-110 uniquely terrifying to market analysts is its radical activation mechanism. Historically, major Bitcoin upgrades require overwhelming miner consensus (usually ~90% or more) to ensure the network stays united.

BIP-110 breaks this norm by utilizing a User-Activated Soft Fork (UASF) with a remarkably low 55% miner signaling threshold.

			
[ Traditional Soft Fork ] ➔ Requires ~90%+ Miner Consensus ➔ Smooth Upgrade
[ BIP-110 UASF Fork ]     ➔ Requires Only 55% Threshold     ➔ High Risk of Chain Split

If the threshold is hit but the remaining 45% of miners reject the rules, the blockchain will violently fork into two. Nodes running BIP-110 would reject blocks containing Inscriptions, while standard nodes would accept them.

The consequences of a chain split would be chaotic:

Market Halted: Exchanges and custodians would likely freeze deposits and withdrawals to guard against “double-spend” attacks.
Collateral Damage: The sweeping data limits in BIP-110 would break advanced, legitimate Bitcoin smart contract layers like BitVM and Miniscript, potentially freezing user funds locked in complex wallets.
The “Airdrop” Effect: As media outlets like Gizmodo have reported, if a split occurs, Bitcoin holders would technically receive “free coins” on the new, minority fork—though its long-term economic value would be highly volatile and uncertain.

The Final Countdown

Despite the deafening online shouting match, the actual economic reality on the blockchain tells a very one-sided story. As of late June 2026, miner signaling support for BIP-110 sits at a microscopic 0.31%, and only roughly 2.38% of total nodes are running the BIP-110 code.

Without a miraculous surge in miner and economic backing over the next month, the activation window in August will come and go without forcing a network-wide rule change. Instead of “cleansing” Bitcoin, BIP-110 users will likely succeed only in removing themselves from the main network—forming a tiny, low-liquidity alternative cryptocurrency asset while the rest of the Bitcoin world keeps moving forward, Ordinals and all.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research and consult with a qualified financial advisor before making investment decisions.

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