Bitcoin upgrades are usually technical discussions that stay within developer and mining communities. BIP-110 was different.

Formally called the Reduced Data Temporary Softfork, BIP-110 attempted to limit how certain types of non-financial data could be stored on Bitcoin. The proposal eventually resulted in a minority chain splitting from Bitcoin in August 2026, only to stall almost immediately.

Check the BTC/INR price today in India. 

To understand why BIP-110 became so controversial, it helps to start with what it was actually trying to change.

What Is BIP-110?

BIP-110 was a Bitcoin Improvement Proposal authored by pseudonymous developer Dathon Ohm, with the original draft and technical advice credited to Bitcoin developer Luke Dashjr. It proposed additional consensus rules that would remain active for roughly one year.

The proposal targeted methods used to store larger amounts of arbitrary data within Bitcoin transactions, including techniques associated with inscriptions.

The argument behind BIP-110 was straightforward: supporters believed Bitcoin block space should primarily support Bitcoin’s monetary function rather than becoming a general-purpose data-storage layer.

Also read: Soft Fork Vs Hard Fork In Blockchain Explained, to understand how changes to blockchain rules can affect network participants.

What Did BIP-110 Actually Change?

BIP-110 was broader than simply changing Bitcoin’s OP_RETURN limit. It proposed several temporary consensus restrictions on newly created transaction outputs.

Among the major changes:

• Most new output scripts would be limited to 34 bytes. Larger scriptPubKeys would generally become invalid under the new rules.
• OP_RETURN outputs would return to an 83-byte limit. This restricted one of the most visible methods for attaching arbitrary data to Bitcoin transactions.
• Certain data pushes and witness elements would be capped at 256 bytes.
• Some Taproot constructions would face additional restrictions, limiting techniques that could be used to embed larger amounts of data.

These restrictions would apply primarily to outputs created after activation and were designed to expire after about a year. Existing coins created before activation were specifically protected from becoming unspendable under the new rules.

BIP-110 was therefore intended as a temporary intervention, not a permanent redesign of Bitcoin.

Why Was BIP-110 So Controversial?

The BIP-110 debate was really a disagreement over who gets to decide what Bitcoin block space is for.

Supporters argued that large inscriptions and other arbitrary data increase blockchain storage and bandwidth requirements. In their view, restricting these uses would help keep Bitcoin focused on payments and monetary activity.

Critics saw a more fundamental problem. If a transaction follows Bitcoin’s rules and pays the required fee, should the protocol decide whether its purpose is acceptable? Prominent critics of the crypto industry argued against imposing these restrictions at the consensus level.

That turned BIP-110 into a broader debate about Bitcoin’s censorship resistance and neutrality.

Bitcoin has faced similar disagreements around network upgrades before. The Taproot upgrade is one example of how changes to Bitcoin can require extensive discussion and coordination across the ecosystem.

How Was BIP-110 Supposed to Activate?

BIP-110 allowed miners to signal support using version bit 4.

If 55% of blocks within a 2,016-block difficulty period signaled support, the proposal could move toward activation without requiring the later mandatory-signaling mechanism. That threshold required 1,109 signaling blocks.

It never came close.

In the final difficulty period before mandatory signaling, only 51 of 2,016 blocks supported BIP-110, equal to 2.53%. However, BIP-110 was designed as a user-activated soft fork. Its mandatory-signaling window still began at block 961,632.

From that point, BIP-110 nodes rejected blocks that did not signal support. Regular Bitcoin nodes continued accepting valid Bitcoin blocks regardless of the BIP-110 signal.

The result was a chain split.

What Happened to BIP-110 After the Bitcoin Fork?

BIP-110 failed to gain enough mining and economic support to challenge the main Bitcoin network. When mandatory signaling began in August 2026, participating nodes split onto a minority chain. That chain produced only two blocks before falling rapidly behind Bitcoin’s main chain.

At block 961,632, BIP-110 nodes rejected a non-signaling block accepted by the main Bitcoin network. A signaling block later gave BIP-110 nodes an alternative chain to follow.

But the new chain had a serious problem: almost no hashpower.

It inherited Bitcoin’s existing mining difficulty while receiving only a tiny fraction of the computational power securing the main network. That made mining new blocks exceptionally slow. The BIP-110 chain produced just two blocks in roughly eight hours, while Bitcoin continued adding blocks normally. By August 11, Bitcoin’s main chain had moved more than 300 blocks ahead, leaving the BIP-110 branch effectively stalled.

The official BIP specification was subsequently marked Closed on August 9, 2026.

Did BIP-110 Affect Bitcoin Holders?

For users holding BTC on the dominant Bitcoin network, the practical impact was limited. The overwhelming majority of mining power remained with the existing Bitcoin chain, which continued processing transactions and producing blocks normally.

The more important takeaway was about Bitcoin governance.

A developer can propose a new rule. Node operators can choose to enforce it. Miners can signal for or against it. But changing Bitcoin in practice requires meaningful coordination across miners, nodes, users, wallets, exchanges, and other economic participants. BIP-110 showed what happens when that broad support does not materialize.

Final Thoughts

BIP-110 ultimately failed to gain the network support needed to become a meaningful Bitcoin upgrade. Miner signaling remained at just 2.53% before mandatory enforcement, and the resulting minority chain produced only two blocks before falling far behind Bitcoin’s main chain.

For BTC holders, the practical impact was limited because the dominant Bitcoin network continued operating normally.

The bigger significance of BIP-110 lies in what it revealed about Bitcoin governance. Developers can propose new rules, miners can signal support, and node operators can choose which software to run, but no single group can redefine Bitcoin on its own.

The debate around inscriptions and block space will continue. BIP-110 showed that lasting change requires broad consensus across the Bitcoin ecosystem.

Further read: 7 Bitcoin Hard Forks That Changed The Network For Good

Frequently Asked Questions

  Disclaimer: Click Here to read the Disclaimer.