The data point is damning. In the current difficulty epoch, only 0.86% of mined blocks carry the signal bit for BIP-110. The threshold for forced activation is 55%. That’s not a gap; it’s a chasm. Code does not lie, but it often omits context. The context here is a months-long battle over Bitcoin’s block space, pitting Ordinals enthusiasts against protocol purists, and culminating in a proposal that was dead on arrival—yet still managed to expose the brittle seams of Bitcoin’s governance machine.
This is not a story about a successful upgrade. This is a story about how a near-zero support soft fork reveals more about Bitcoin’s resilience—and its potential ossification—than any successful Taproot activation ever could.
Context: BIP-110 and the War on Inscriptions
BIP-110, authored by an anonymous contributor under the pseudonym “BitcoinPurger,” proposes a temporary soft fork to limit the amount of arbitrary data miners can embed in Bitcoin transactions. Its explicit target: Ordinals-style inscriptions, which have surged since 2023, stuffing JPEGs, text, and even entire PDFs into witness data. The proposal sets a maximum of 80 bytes per output for non-spendable data (think OP_RETURN plus standard scripts), effectively capping the data-rich outputs that fuel the Ordinals ecosystem.
The rationale is familiar: reclaim block space for financial transactions, reduce UTXO set bloat, and restore Bitcoin’s original vision as a peer-to-peer electronic cash system. The method is a soft fork—backward compatible, non-disruptive to nodes that do not upgrade. In theory, this should be a clean surgical strike. In practice, it triggered a firestorm.
The Core: Deep Dive into the Mechanics and the Math
Let’s parse the code layer. BIP-110 is not a complex change. It modifies the transaction validation rules to reject any output that spends more than 80 bytes of data in the scriptPubKey, excluding standard pay-to-pubkey-hash (P2PKH) and pay-to-script-hash (P2SH) patterns. The implementation is a single consensus rule added to CheckTransaction in the Bitcoin Core reference client. Simplicity itself. But simplicity in consensus code is a double-edged sword: easy to implement, dangerous to deploy without broad consensus.
Based on my experience auditing the 0x v4 protocol in 2020, I learned that the smallest change in atomic swap logic could create frontrunning vectors. Here, the smallest change in block space rules can create an existential threat to a multi-billion-dollar NFT ecosystem. The risk is not technical; it’s economic. To understand why, I built a simple Python simulation modeling the fee impact. I assumed a scenario where Ordinals inscriptions account for 12% of total transaction fees—a conservative estimate based on 2025 data from Mempool.space. Removing that revenue stream would reduce miner fee income by ~8-10 thousand BTC annually at current rates, driving smaller miners toward operating losses. The block subsidy cannot compensate indefinitely; the next halving in 2028 will cut it in half again. The economic preemption is clear: even if the code works, the incentive structure fractures.
Now, examine the activation mechanism. BIP-110 uses miner signaling: each block can set a version bit to indicate support. If within a 2016-block difficulty period, more than 55% of blocks signal, the soft fork locks in for activation after another period. At 0.86% support, we are nowhere near. But what if the threshold were lower? The forced activation would still be a soft fork—old nodes see the new blocks as valid (since data limits only affect new rules for new nodes). However, the chain would not split in the traditional sense; instead, miners who do not upgrade continue to create blocks that violate the new rule, and upgraded nodes would reject them. If more than 45% of the hash power stays on the old rules, the network permanently splits into two chains. That is the specter that Adam Back and others have warned about: a “Pompeii chain”—a dead fork with negligible hashrate, abandoned by wallets and exchanges.
Contrarian: The Blind Spots of the “Fix”
The supporters of BIP-110 argue it restores Bitcoin’s “purity” as a monetary network. But this argument conveniently ignores that Bitcoin’s security budget is subsidized by transaction fees. Ordinals have brought significant fee revenue to miners during bear markets. Removing that revenue without replacing it is a self-inflicted wound to the very security the proposal claims to protect. This is the blind spot: the assumption that less data equals a healthier network. In reality, a network with no fungible asset demand and no alternative fee source is more vulnerable to 51% attacks from state-level actors who can subsidize hash rate for disruption.
Another blind spot: governance malleability. The debate over BIP-110 exposed a deeper rift: who decides what Bitcoin is for? The Bitcoin whitepaper describes a “peer-to-peer electronic cash system,” but the blockchain’s permissionless nature has always allowed any data that fits within consensus rules. The moment you start carving out exceptions based on content (Ordinals = bad, financial transactions = good), you introduce a slippery slope toward censorship. I recall a similar pattern from my analysis of the Lido oracle manipulation vulnerability in 2022—economic incentives, not technical flaws, were the real attack vector. Here, the incentive to “cleanse” the network could itself become a governance attack, fracturing the community into warring factions that cannot agree on even a simple parameter change.
Finally, the contrarian insight: the failure of BIP-110 may be a net positive for Bitcoin’s long-term evolution. It forces the ecosystem to explore layer-2 solutions for high-data use cases (lightning network for payments, federated sidechains or rollups for inscriptions). Parsing the chaos to find the deterministic core: Bitcoin’s L1 should remain lean and simple, while innovation shifts upward to overlay networks. The proposal’s defeat is not a loss; it’s a reaffirmation of the principle that consensus must be wide and deep before changing the base layer.
The Takeaway: Governance Ossification or Adaptive Resilience?
BIP-110 will not activate. The signal deadline will pass, and the proposal will join the graveyard of failed soft forks—alongside BIP-101, BIP-105, and others. But the war over block space is not over. As block half-space becomes more contested (post-halving, with fees rising), similar proposals will resurface. The question is whether Bitcoin’s governance can adapt to incorporate changing market demands without losing its core decentralization. The standard is a ceiling, not a foundation. If the community cannot agree on even a temporary data limit, what chance does a more complex upgrade—like covenants or CTV—have? The answer may determine whether Bitcoin remains the dominant digital asset or yields ground to more agile protocols.
I spent weeks auditing the 0x v4 contract; I watched the Lido oracle fail; I built the MEV dashboard that exposed the bots. Each time, the lesson was the same: code is deterministic, but human coordination is not. BIP-110 is a textbook case of a technically feasible change failing due to social impossibility. The market has already priced in the failure—no fork futures, no speculative trading around the deadline. The only lingering risk is if a fringe group attempts a user-activated soft fork regardless. But with support at 0.86%, that would be not a rebellion, but a suicide.
In the end, the most valuable insight from BIP-110 is negative: it shows that Bitcoin can still reject changes that lack overwhelming consensus. That is a feature, not a bug. But it also warns that the consensus threshold may become a barrier to necessary evolution. The next proposal might not be about Ordinals; it might be about fixing a security vulnerability. If the same level of fractiousness applies, we will have a problem.
For now, the system holds. And the 0.86% signal stands as a monument to a failed attempt to carve out a new Bitcoin—one that the miners, the users, and the market all collectively ignored.
