BIP-110 Hits Mandatory-Signaling Phase with Miners Underwhelming Support

Bitcoin Improvement Proposal (BIP) 110 has entered its mandatory-signaling phase, but miners have shown little enthusiasm for the proposal. According to a BIP-110 monitor, at block 961,632, only 51 of the preceding 2,016 blocks signaled support, equivalent to just 2.53%. This falls far short of the 55% threshold needed for early activation.

The mandatory-signaling phase began when nodes enforcing BIP-110 started rejecting blocks that did not set version bit 4 in their block version field. However, standard Bitcoin nodes continued accepting both signaling and non-signaling blocks, creating a potential split between enforcing and non-enforcing participants.

BIP-110 aims to temporarily restrict on-chain data to reduce storage and bandwidth pressure. Critics argue that the proposal could force rule-divergent behavior across the network. The BIP's author, pseudonymous developer Dathon Ohm, proposes limiting most new output scripts to 34 bytes and capping OP_RETURN outputs at 83 bytes.

Supporters of BIP-110 argue that these limits would discourage practices they view as non-monetary, such as inscriptions and other uses that can increase storage and bandwidth costs for node operators. However, prominent figures in the Bitcoin ecosystem, including Strategy Executive Chairman Michael Saylor and Blockstream CEO Adam Back, have expressed concerns that BIP-110 could divide Bitcoin and lead nodes to reject transactions that the network's existing rules would otherwise permit.