Bitcoin is having another one of its family arguments, and this time it’s about what kind of data belongs on the blockchain. BIP-110, a proposed soft fork that would restrict non-financial data in Bitcoin transactions, is heading toward its mandatory signaling phase in early August with almost no miner backing and a community split that echoes the nastiest governance fight in Bitcoin’s history.

Miner support for BIP-110 has hovered between 0.3% and 0.4% since signaling began on December 1, 2025. To put that in context, the proposal needs 55% miner support for early lock-in. It’s not even in the same zip code.

What BIP-110 actually does

Authored by developer Dathon Ohm, BIP-110 would constrain the storage of non-monetary data on Bitcoin’s blockchain for roughly one year. The proposal would grandfather existing data already on-chain. It’s not trying to erase history, just change the rules going forward, at least for about 12 months.

Opponents see it very differently. Blockstream CEO Adam Back and MicroStrategy founder Michael Saylor have both pushed back against BIP-110, viewing it as a dangerous consensus intervention. Their argument boils down to a philosophical point: Bitcoin’s strength comes from its resistance to top-down rule changes, and restricting what kinds of transactions are “allowed” sets a precedent that could be weaponized later.

The activation timeline and why it matters

BIP-110 signaling on bit 4 has been live since December 2025, but the proposal is now approaching the stages where things get real. Mandatory signaling is projected to begin around block 961,632, estimated to land between August 7 and August 15, 2026. If the proposal somehow clears that hurdle, enforcement could follow near block 965,664 in September 2026.

The activation strategy borrows from the UASF playbook, the same user-activated soft fork approach that played a pivotal role during the 2017 Blocksize Wars. Back then, a minority of nodes threatened to reject blocks that didn’t signal for SegWit, effectively forcing miners to comply or risk mining on a minority chain.

Node adoption sits in the low single digits, concentrated almost entirely among users running Bitcoin Knots rather than the far more popular Bitcoin Core client. On the mining side, no major pool has shown meaningful interest. F2Pool, one of the largest mining operations in the world, has given no indication of support. The only visible signals have come from small operators like Barefoot Mining, which barely registers as a rounding error in Bitcoin’s total hashrate.

Echoes of the Blocksize Wars

The Blocksize Wars of 2015-2017 pitted those who wanted bigger blocks against those who preferred a more conservative approach to scaling. That conflict ultimately led to the Bitcoin Cash fork and established an informal precedent: changing Bitcoin’s consensus rules requires overwhelming agreement, and attempts to force changes through without it get rejected.

BIP-110 is testing whether that precedent holds in reverse. Instead of expanding what Bitcoin can do, it’s trying to restrict it. And it’s doing so through the same UASF mechanism that small-block advocates used successfully almost a decade ago, just with a fraction of the support.

What this means for investors

BIP-110 is almost certainly going to fail on the primary Bitcoin chain. Sub-1% miner signaling seven months into the process, with mandatory activation weeks away, means the proposal has no realistic path to consensus-level adoption. The most likely outcome is that BIP-110 either fizzles out entirely or results in a tiny minority chain that attracts negligible economic activity.

Investors should watch for two things. First, whether any major mining pool breaks ranks and signals for BIP-110 before the August deadline, which would fundamentally change the calculus. Second, whether the debate spills over into broader market sentiment around Bitcoin’s governance model.

The inscription economy that BIP-110 targets, including Ordinals and BRC-20 tokens, has become a meaningful source of miner fee revenue. Restricting that activity would reduce transaction fee income for miners, which helps explain why pools aren’t exactly rushing to support a proposal that would shrink their revenue.