Key Takeaways:
Bitcoin's most contentious governance battle of 2026 is heading toward a quiet defeat, with the BIP-110 soft fork mustering just 0.31% of total hashrate support less than six weeks before its mandatory signaling phase.
The proposal, designed to restrict non-financial data on Bitcoin's blockchain by capping transaction output data at 34 bytes and limiting OP_RETURN usage to 83 bytes, has failed to gain traction among major mining pools since voting opened in December 2025. The mandatory signaling phase is projected to begin around block height 961,632, between Aug. 7 and Aug. 15, according to the proposal's timeline. To achieve early lock-in, 55% of miners must signal support within a two-week window spanning 2,016 blocks — a threshold that currently sits 54.69 percentage points out of reach.
"The proposal's restrictions would only apply to nodes that choose to enforce them, creating a real risk of a chain split if enforcement is inconsistent," Adam Back, chief executive of Blockstream, said in public comments on the proposal. His concerns were echoed by MicroStrategy Chairman Michael Saylor, who described the internal regulatory measure as an unnecessary risk to the global stability of the system.
Node support for BIP-110 stood at roughly 2% to 3% in early 2026, translating to about 583 out of approximately 24,481 nodes, with much of that attributed to Bitcoin Knots software rather than deliberate ideological alignment. The first block signaling support was mined by Ocean pool in March 2026 — an outlier operation run by Bitcoin Core developer Luke Dashjr that has long filtered certain transaction types larger pools process without hesitation. Since then, no major mining pool has joined. The 0.31% hashrate figure represents roughly 5 EH/s out of a total network hashrate of approximately 940 EH/s.
The economic incentives that sustain Bitcoin's security model are at the heart of the standoff. The introduction of the Runes protocol in October 2024 generated a 32% increase in transaction fees collected by miners, according to market data from that period. Proponents of BIP-110 argue that protocols like Ordinals and Runes have driven up fees and forced node operators to store gigabytes of non-monetary data without compensation. Opponents counter that this fee flow strengthens network security and that miners — who process transactions for profit — have little reason to support a rule change that would reduce their revenue.
Developers have already moved to circumvent the proposed restrictions. On July 2, programmer lifofifoX published an update that splits large files into multiple fragments of allowed size, effectively bypassing the proposal's data limits. Ordinals creator Casey Rodarmor validated the technical change on GitHub, signaling that the inscription ecosystem intends to persist regardless of the vote's outcome.
The critical mandatory voting period in the second week of August will determine whether the ecosystem assimilates the rule or whether dissenting software gives rise to a minority alternative asset. Luke Dashjr, maintainer of Bitcoin Knots and a contributor to the initial draft, warned on July 3 that failure to pass BIP-110 would cause Bitcoin to lose the scarcity and spam resistance that differentiate it from central bank digital currencies. "If BIP-110 fails, Bitcoin fails with it," he wrote on X. "I am not interested in any CBDC, much less an unregulated CBDC pretending to be decentralised."
For market participants, the near-certain failure of BIP-110 means Ordinals, Runes, and similar protocols are unlikely to face base-layer restrictions anytime soon. The economic incentives for miners to process these transactions remain intact, and the political will to restrict them does not exist at the hashrate level where it matters. Bitcoin's upgrade mechanism requires overwhelming consensus — and BIP-110's inability to gain traction shows that even proposals with passionate grassroots support can stall completely when they conflict with miner economics.
This article is for informational purposes only and does not constitute investment advice.
