What Is BIP-110? Bitcoin's Reduced Data Temporary Soft Fork and the Replay Attack Risk

What BIP-110 Restricts and Why It's Controversial

If activated, BIP-110 would enforce seven new consensus restrictions on Bitcoin transactions for approximately one year, including :

• Limiting data pushes and witness elements to 256 bytes maximum
• Capping the total data-carrying capacity per transaction
• Restricting how inputs spending certain UTXO types can embed data

The stated goal is to temporarily "correct distorted incentives" caused by standardized support for arbitrary data and refocus Bitcoin on its function as money . Critics, including Blockstream CEO Adam Back and Strategy Executive Chairman Michael Saylor, have argued that the proposal's activation parameters are reckless and risk an unnecessary chain split with no economic value .

What Happened at Block 961,632

The mandatory signaling window — running from block 961,632 through 963,647 — is the proposal's final activation path after failing to reach its 55% voluntary miner threshold during any prior difficulty period .

From that block onward, any node enforcing BIP-110 treats every non-signaling block as invalid. If the majority of miners continue producing standard blocks (which they are, given near-zero support), those enforcing nodes will begin accumulating a separate, minority chain with far less hashrate .

Activation of the new transaction rules, should lock-in occur, is projected for block 965,664 around early September 2026 .

Miner Support: ~2.6% vs. a 55% Threshold

Miner support has never come close to the required threshold. Key data points:

Most signaling comes from OCEAN pool and small miners; major pools such as Antpool and ViaBTC are not signaling . The threshold requires 1,109 out of 2,016 blocks in a single difficulty period to lock in early .

Three Possible Outcomes

1. Failed activation (most likely). If support never reaches the 55% threshold during the mandatory window, BIP-110 simply does not activate and expires. This is the widely expected outcome given near-zero miner backing . The mandatory signaling window runs until about block 963,648 (late August) .

2. Sudden late miner rally. A significant portion of hashrate could flip to signaling at the last minute, crossing the 55% threshold and locking in the soft fork. While considered unlikely, some observers note the window remains open until late August .

3. Minority chain split. The most dangerous scenario. If BIP-110-enforcing nodes reject non-signaling blocks while the vast majority of miners keep mining normally, the network could split into two chains — a minority chain following BIP-110 rules and a majority chain that does not . Adam Back and Michael Saylor have warned that this could produce a minority fork with no economic value .

Risks to Bitcoin Holders: Replay Attacks, Reorgs, and Confusion

Replay attack risk. This is the most concrete danger for ordinary holders. Bitcoin developer Kevin Loaec has warned that if a minority chain split occurs, transactions signed on one chain could be replayed on the other . Specifically, if a holder sells coins from the minority fork chain, the buyer could replay the signed transaction on the original Bitcoin chain, effectively stealing the holder's real BTC .

Without built-in replay protection between the two chains — which BIP-110's deployment does not include — the same transaction is valid on both chains. A holder who receives payment for a minority-fork coin could then have the corresponding main-chain BTC drained by the buyer .

Reorg risk. Bitcoin Core developer Jon Atack warned users to pause BTC transfers during the second week of August due to potential chain reorganizations near the mandatory signaling window, which could cause transactions to be reversed or double-spent .

Exchange and wallet confusion. Exchanges and wallets that do not clearly distinguish between the two chains could process deposits or withdrawals on the wrong chain, leading to lost funds .

Economic value uncertainty. If a minority chain persists, market confusion over which chain is "real" Bitcoin could cause temporary price volatility and liquidity fragmentation across exchanges .

How to Protect Yourself

Bitcoin developers have issued straightforward advice for the period surrounding the mandatory signaling window:

• Do not move BTC on-chain during the second week of August unless absolutely necessary .
• Do not attempt to sell or claim coins from any fork without understanding how to separate your balances and ensure replay protection .
• If you run a node, understand which software version you are running and whether it enforces BIP-110's version bit 4 rejection. The proposer, Dathon Ohm, urged users to switch from Bitcoin Core to Bitcoin Knots — the opposite of what most node operators would do to stay on the majority chain .

As developer Kevin Loaec put it: "The safest course of action for holders is to do nothing until the situation can be resolved and the chains can be separated."