Bitcoin Rejects BIP-110 Fork With 99.85% Hashpower Against Proposal
Bitcoin’s decentralized consensus mechanism faced a critical test on August 9 when BIP-110, a controversial soft fork designed to restrict data-heavy transactions, spectacularly failed after producing just two blocks before the overwhelming majority of miners abandoned the chain. The failed fork demonstrates that Bitcoin’s network remains firmly unified against the proposal, with 99.85% of hashing power rejecting the temporary restriction on Ordinal inscriptions and other non-financial data.
The Fork That Never Was
BIP-110 entered its mandatory signaling window at block 961,632 on August 9 with the stated goal of temporarily restricting arbitrary data from Bitcoin transactions for approximately one year. Proponents argued the fork would reduce network spam caused by Ordinal inscriptions and BRC-20 tokens, which they viewed as cluttering the blockchain with non-financial data. However, the market’s judgment proved swift and unambiguous. According to WuBlockchain’s market update, the BIP-110 chain managed to produce only blocks 961,632 and 961,633 before stalling, leaving the enforcing branch 57 blocks behind the dominant chain and holding a mere 0.15% of total network hashpower.
The signaling period leading up to the fork had already provided clear warning signs. In the final signaling window before the split, only 51 blocks transmitted support signals—representing just 2.53% of blocks, far short of the 55% threshold required for BIP-110 to lock in. Miners across the network had made their position unmistakably clear long before the fork officially triggered.
Miner Consensus and Notable Reactions
The overwhelming rejection came as little surprise to close observers. Michael Saylor, strategy executive chairman at MicroStrategy, had publicly predicted the fork would stall into irrelevance, noting the preliminary 2.6% miner signaling made liftoff impossible. Blockstream CEO Adam Back, commenting on the chain split’s immediate failure, offered a characteristically blunt assessment: “They forked off and found out.”
Ocean Pool emerged as the primary supporter throughout this episode, representing the most active voice backing BIP-110 since the first block appeared in March 2026. Despite their efforts, their hashpower proved insufficient to sustain an alternative chain. The mining community’s decision to remain unified on the main chain rather than fragment over the data restriction proposal underscores a deeper consensus: the network’s users and operators prefer to tolerate data-heavy transactions rather than impose temporary censorship measures.
Network Activity Surges Despite Fork Drama
Interestingly, Bitcoin’s fundamental health indicators remained robust throughout the governance drama. The network recorded a sharp increase in on-chain activity, with approximately 2.27 million new wallets and 751,000 active wallets reported across the network—representing one of Bitcoin’s strongest periods of user activity in recent months. This resurgence signals sustained interest in the cryptocurrency despite recent security challenges and regulatory headwinds.
On-chain metrics compiled by Block Digest show a BD Pulse Score of 65 out of 100 in bullish territory, though the BD Extreme Index stands at plus 1.00 sigma, indicating overbought conditions. Bitcoin’s long-to-short account ratio of 1.17 reflects modest bullish positioning, with 53.8% of accounts holding long positions against 46.2% short.
The Coldcard Effect and ETF Tailwinds
Bitcoin ETF inflows have surged to their strongest levels since April, with the category pulling in $853 million in the week following the Coldcard hardware wallet firmware vulnerability disclosure. The breach, which affected older Coldcard models including the Mk3 series, exposed a critical weakness: seed phrase generation had been running at only 40 bits of entropy instead of the proper 256 bits. This dramatically reduced randomness made private key reconstruction mathematically feasible for attackers.
TRM Labs documented more than $116 million stolen from over 5,200 addresses, while Galaxy Research confirmed over $100 million in losses across approximately 7,300 addresses and suspects the total reaches closer to $130 million across more than 7,700 compromised wallets. Rather than dampening institutional enthusiasm, the breach appears to have driven it. Eric Balchunas, senior ETF analyst at Bloomberg, directly connected the hack to surging institutional inflows into leading Bitcoin ETF products like IBIT and FBTC, characterizing the current flow as “an excellent cash inflow after a brutal summer” for these funds.
What This Means for the Market
The failed BIP-110 fork reveals Bitcoin’s governance structure working as designed: decentralized consensus prevented a contentious change from splitting the network, even as the proposal garnered support from prominent mining pools and influential figures. The fork’s failure also highlights an ongoing tension within the community between those who view data-heavy transactions as innovation and those who view them as network degradation. Yet market participants have voted decisively for the status quo.
Bitcoin’s price hovered near $64,882 on August 10, down 0.09% in the prior 24 hours with $13.72 billion in daily volume, relatively unmoved by the fork drama itself. The sustained surge in new wallet creation and the robust ETF inflows suggest institutional confidence in Bitcoin’s long-term direction persists despite both governance friction and the Coldcard security incident.
The confluence of network strength, miner consensus against restrictive proposals, and institutional capital inflows indicates market participants remain confident in Bitcoin’s ability to resolve conflicts through its inherent consensus mechanisms rather than contentious hard or soft forks.
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