Fork in the road ahead. At block 961,632, a group of Bitcoin node operators decided to enforce a new rule: reject any block that did not signal support for BIP-110. The result? Eight hours later, the new chain had mined exactly two blocks. The main chain, meanwhile, continued its steady rhythm, adding 49 blocks in the same period. This is not a story about a failed upgrade. It is a stark reminder of who holds the real power in Bitcoin's consensus mechanism: the miners, and their economic incentives.
Context: The BIP-110 Proposal and Its Activation Mechanism
BIP-110 was a Bitcoin Improvement Proposal aimed at restricting the amount of non-financial data that could be included in transaction scripts. In plain terms, it was a direct attack on Ordinals inscriptions—the Bitcoin-native NFT craze that had been clogging block space and driving up fees. The proposal set a threshold of 55% of blocks in a 2,016-block difficulty period signaling support for activation. This was a deliberate middle ground: high enough to avoid a minority veto, but low enough to allow for a broad consensus. To further pressure adoption, the activation mechanism included a user-activated soft fork (UASF) component: nodes would refuse to accept blocks that did not contain the signal after the activation block height.
On paper, it seemed like a classic hybrid approach—combining miner signaling with node enforcement. In practice, it was a disaster. The previous signaling period had recorded only 51 blocks (2.53%) supporting BIP-110. The threshold was 55%. The gap was not just a statistical anomaly; it was a reflection of the complete lack of economic alignment between the proposal and the miners who actually secure the network.
I have seen this pattern before. In my work analyzing cryptographic protocols, I've tracked dozens of proposals that underestimated the gravitational pull of miner incentives. The BIP-110 fork is a textbook case of a "minority hard fork" dressed in soft fork clothing. The nodes enforced the rule, but no miner with significant hashrate followed. The two blocks that appeared on the new chain were likely mined by the proposal's own advocates using a couple of ASICs or CPU miners—a symbolic gesture, not a viable chain.
Core: Why BIP-110 Failed — A Technical and Economic Dissection
Let's start with the numbers. The activation threshold was 55% of blocks in a 2,016-block window. That is roughly 1,109 blocks. The actual support in the prior window was 51 blocks. That is a 21x gap. The fork was triggered at block 961,632, and by block 961,681 on the main chain (49 blocks later), the fork had only reached height 961,633. That's a 48-block deficit. To put it bluntly, the new chain is not just slow—it's effectively dead. At 8 hours for 2 blocks, its hashrate is negligible. Any transaction on that chain would be vulnerable to a 51% attack from a single laptop.
But the failure is not just about hashrate. It's about the fundamental misalignment of incentives. BIP-110 is a "subtractive" proposal: it removes functionality (the ability to inscribe large data) without offering any compensation. Miners profit from transaction fees. Ordinals inscriptions have been a significant source of fees, especially during periods of high activity. In the months leading up to the fork, Ordinals transactions accounted for a non-trivial percentage of total fees. The last thing miners want is to kill a revenue stream. The data is clear: the majority of miners chose to ignore the fork entirely. They didn't even bother to signal against it; they just didn't signal.
From a technical perspective, the UASF mechanism of BIP-110 was flawed. User-activated soft forks work when there is a credible threat of a chain split that forces miners to comply to avoid losing revenue. The canonical example is BIP 148 (SegWit UASF) in 2017, where miners eventually signaled support because the alternative was a split that could damage the network effect. BIP-110 lacked that credibility. The support base was too small, and the economic cost of ignoring the fork was zero. Miners calculated that the risk of losing Ordinals fees outweighed any benefit from compliance. They were right.
Another critical detail: the activation threshold of 55% was never going to be reached, but the fork was triggered anyway. This suggests that the proponents were not interested in a gradual consensus—they wanted to force a showdown. In Bitcoin governance, that is a losing strategy. The network's consensus rules are as much a product of game theory as they are of code. When you push a rule that miners don't want, they will simply not follow. The fork becomes a dead chain, a ghost in the blockchain.
Pattern emerging from chaos. This is not the first time a minority has attempted to enforce a rule change via UASF. But BIP-110 is unique because it targets data usage, not block size. It reveals a deeper fissure in the Bitcoin community: the "Bitcoin as pure money" faction versus the "Bitcoin as a settlement layer for all data" faction. The Ordinals boom has turned Bitcoin into a venue for digital artifacts, and many long-time Bitcoiners see this as a degradation of the network's original purpose. The BIP-110 fork was their attempt to reclaim the chain. It failed, but the conflict is not over.
Contrarian Angle: The Fork's Failure Is a Trap for Ordinals Optimists
The immediate reaction among Ordinals enthusiasts was relief. "The fork failed, we are safe," they thought. But this is a misleading conclusion. The BIP-110 episode actually reveals how fragile the Ordinals ecosystem is. The fact that a group of node operators felt compelled to attempt a fork signals deep dissatisfaction with the status quo. The failure does not mean that future attempts won't succeed. In fact, it may embolden the "clean Bitcoin" faction to prepare more carefully the next time.
Furthermore, the miners' current support for Ordinals is not ideological. It is purely economic. If Ordinals transactions lead to sustained congestion, increased orphan rates, or higher variance in block rewards, miners could easily shift their stance. They are not loyal to inscriptions; they are loyal to fees. A future proposal that offers a side payment or a different incentive structure—perhaps limiting only the largest inscriptions while allowing small ones—could gain traction. The BIP-110 failure does not close the door; it just shows that the door requires a different key.
Metadata mismatch found. There is also a hidden risk: the fork's failure might lead to a false sense of security among Ordinals holders. They may ignore the governance signals because the immediate threat vanished. But the broader debate about block space usage is not going away. In fact, the BIP-110 event has amplified the discussion. More developers and node operators are now aware of the issue. Future proposals may be more sophisticated, using transaction policies or mempool filtering rather than consensus rules. These are harder to fight because they don't require a fork—they can be implemented by individual miners or mining pools.
Liquidity evaporation detected. The two blocks on the new chain represent a liquidity vacuum. No exchange, no wallet, no DeFi protocol will support a chain with 0.0001% of the main chain's hashrate. The fork is economically irrelevant, but its symbolic impact is significant. It shows that the Bitcoin governance machine is not broken; it is working exactly as designed. The majority rules, and the majority is the economic majority of miners.
Takeaway: The Next Fork Will Be Different
BIP-110 is a case study in Bitcoin governance friction. The proposal failed because it attempted to impose a cost on miners without offering any benefit. The next attempt to restrict non-financial data will need to be more clever. It might involve a "tokenized" incentive for miners, or a phased approach that first limits the most egregious data bloat. For Ordinals investors, this is a temporary reprieve, not a permanent guarantee. The clock is ticking, and the next fork might not be so easy to dismiss.
Fork in the road ahead. The road is not settled; it is just beginning to diverge.