Bitcoin Improvement Proposal 110 (BIP-110) entered its mandatory-signaling phase at block 961,632 on Saturday, marking a critical juncture in the debate over how Bitcoin's block space should be used. According to the BIP-110 monitor, miners had signaled support in only 51 of the preceding 2,016 blocks — a 2.53% participation rate — far below the 55% threshold required for early activation.

Starting at block 961,632, nodes enforcing BIP-110 began rejecting blocks that did not set version bit 4, while standard Bitcoin nodes continued accepting both signaling and non-signaling blocks. A minority BIP-110 chain briefly emerged but quickly fell behind the dominant chain. Given the low signaling rate, a sustained competing chain appears unlikely without substantially greater miner participation. A BIP-110 branch could advance slowly or stop producing blocks altogether.

Proposal Aims to Limit Non-Monetary Data on Bitcoin

Authored by pseudonymous developer Dathon Ohm, BIP-110 proposes temporary consensus restrictions lasting approximately one year. The proposal would limit most new output scripts to 34 bytes, cap OP_RETURN outputs at 83 bytes, restrict certain data pushes and witness elements to 256 bytes, and temporarily limit several Taproot features. Unspent transaction outputs created before activation would be exempt.

Supporters argue the restrictions would discourage inscriptions and other non-monetary data that increase storage and bandwidth costs for node operators. Inscriptions, enabled by the Ordinals protocol launched in January 2023, allow arbitrary data such as images and text to be recorded on individual satoshis. Their growing use has driven larger blocks and at times elevated transaction fees, intensifying a long-running debate over whether Bitcoin should serve primarily as a monetary network or also host broader data applications.

Critics, including Strategy executive chairman Michael Saylor and Blockstream CEO Adam Back, have cautioned that the proposal could divide the network and lead enforcing nodes to reject transactions permitted under Bitcoin's existing rules.

Deployment Schedule and Contingency Planning

The proposal uses version bit 4 for miner signaling. Its deployment schedule designates blocks 961,632 through 963,647 as the mandatory-signaling window, during which enforcing nodes reject non-signaling blocks. The specification defines block 963,648 as the beginning of its locked-in state and block 965,664 as the point at which transaction restrictions take full effect.

BIP-110 proponents have also discussed a more extensive fallback. On August 1, Bitcoin developer Chris Guida rebased preliminary code for a proof-of-work change originally written by Bitcoin Knots maintainer Luke Dashjr. The code comparison was made publicly available, and Guida described the effort on X as a contingency in case miners oppose BIP-110, though he noted that no activation date had been set. A proof-of-work change would be among the most disruptive measures in Bitcoin's history, effectively forcing miners off the network's current hashing algorithm.