BIP-110: The Soft Fork That Bitcoin Never Wanted
On July 23, 2026, Adam Back delivered what amounts to a eulogy for BIP-110. The proposal to temporarily cap arbitrary data in Bitcoin transactions—an explicit attack on Ordinals inscriptions—has a miner signal of 0.86%. That’s not a close race. That’s a corpse that hasn’t stopped twitching. The math didn’t: 55% threshold required for activation, 0.86% delivered. This isn’t governance; it’s abandonment. Back’s tone was almost bored. "Pompeii chain," he called the hypothetical split. The proposal’s failure was priced in long before the words left his mouth.
The context is simple: BIP-110 is a soft fork that would limit the size of data miners can embed in Bitcoin transactions. Its explicit target is the Ordinals protocol, which uses witness data to inscribe arbitrary content—images, text, even executables—onto the blockchain. Proponents argued that inscriptions degraded block space efficiency and raised fees for standard transfers. The solution: a temporary cap on data carrying capacity until a more permanent fix could be designed. The mechanism: miner signaling over a difficulty period. The reality: no one cared.
The core of the analysis is a systemic teardown. First, technical feasibility is not the issue. BIP-110 is a minor change to block validation logic. Any competent developer could implement it in a weekend. The problem is economic and social. Miners earn transaction fees from Ordinals. In 2025, data-heavy inscriptions contributed an estimated 12% of total miner fee revenue. Asking miners to vote on a proposal that cuts their own income is like asking a butcher to go vegan. Unsurprisingly, the 0.86% support came almost entirely from small miners with no loyalty to the Ordinals ecosystem. The remaining 99.14% either opposed or ignored the proposal entirely.
Second, the governance mechanism itself is brittle. BIP-110 uses "force signaling" – if 55% of blocks in a difficulty period signal support, the fork activates automatically. This design was intended to prevent a vocal minority from blocking change. But in practice, it creates a dangerous cliff: if support crosses 55% unexpectedly, the chain could split before anyone is ready. Back predicted that even if forced through, the split chain would "stall almost immediately" because 55% of miners wouldn’t stay on a chain that loses 12% of their income. The remaining 45%? They’d be on a chain with no economic backing. This is fragility analysis at its finest. The proposal doesn't just fail to achieve consensus—it risks creating a dead chain that exist only as a proof of concept.
Third, the economic incentives of the opposing side are misaligned. Ordinals supporters have no reason to support a cap. They see inscriptions as a legitimate use of block space. The utility might be speculative—speculation masks the absence of utility in many of these assets—but the demand is real. A cap would destroy that demand. The proposal offered no compensation mechanism, no transition period, no alternative. It was a blunt instrument applied to a complex market. That’s not risk management; it’s wishful thinking. Security isn’t the foundation here—incentive alignment is.
From my own audit experience—specifically during the DeFi summer of 2020—I learned to value miner incentives above all else. When Harvest Finance was exploited, the failure wasn’t a code bug; it was the lack of an emergency pause mechanism. The code was correct, but the economic risk was ignored. BIP-110 makes the same mistake. It assumes miners will vote against their own revenue because it’s good for the network long-term. But miners aren’t altruists. They amortize hardware and electricity costs. Any proposal that cuts revenue without promising compensation will fail. The math didn’t, and it never will.
Fourth, the institutional cost of this debacle is measurable. The months of debate distracted core developers from more pressing issues—like state of Lightning Network usability or persistent mempool congestion. The opportunity cost is hard to quantify, but the signal is clear: Bitcoin governance can be hijacked by niche debates at the expense of systemic improvements. This is the same pattern I saw in 2021 during the NFT wash-trading scandals. 70% of volume came from a single entity. The market ignored it because the narrative was exciting. BIP-110 is the same illusion of activity—a lot of noise, zero structural integrity.
The contrarian angle is worth articulating: the proponents had a point. Ordinals inscriptions do consume block space and push up fees for ordinary users. In the months leading up to the proposal, median transaction fees rose from $2 to $8. For low-value transactions, that’s significant. The proposal, in a vacuum, had economic rationale. But that rationale ignored the real-world power dynamics. Bitcoin’s governance is not a meritocracy of ideas; it’s a negotiation between miners, nodes, and economic users. BIP-110 failed because it tried to bypass that negotiation. The bulls were right about the problem but wrong about the solution. They expected a technical fix for a political problem. That never works in decentralized systems.
The takeaway is cold and direct: Bitcoin’s governance inertia is not a bug—it’s a feature. BIP-110 will join the ranks of failed proposals like BIP-101 (the 8MB block size increase) and BIP-148 (UASF for SegWit). Each one tested the boundaries of consensus and found them firm. The protocol changes only when the economic majority is convinced. Emotion is the variable that breaks the model—proponents were emotional about Ordinals, so they overlooked the lack of miner support. Every rug has a seam you missed: the seam was the incentive structure.
Looking forward, the death of BIP-110 doesn’t end the debate. Ordinals will continue to consume block space. Fees will fluctuate. And eventually, another proposal will emerge—likely with built-in compensation for miners or a longer activation timeline. But that’s a future concern. For now, Bitcoin remains unchanged. The speculative market in Ordinals can breathe easy. But the structural risk of governance gridlock persists. Hype burns out; structural integrity remains. BIP-110’s failure is a reminder that in Bitcoin, change is slow by design. And that’s the only reason the network still exists.