Bitcoin Chain Splits as BIP-110 Supporters Create Separate Branch

A disagreement over how to manage Bitcoin's limited block space has led to a chain split. The split occurred on Saturday when nodes running BIP-110, a proposal that restricts non-financial data on the blockchain, began rejecting blocks without the signal for support. However, only a small minority of miners supports the forked chain.

BIP-110 proposes a one-year rule that would limit certain types of transaction data. The proposal has been contentious, with some arguing it will help prevent spam and others saying it restricts users' freedom to use the blockchain as they see fit. Bitcoin's main chain is currently ahead of the forked chain by seven blocks.

The BIP-110 chain requires miners to signal support for the proposal in order to produce blocks on the new chain. As of now, only a small percentage of miners have signaled support, and it remains unclear whether the new chain will survive or gain economic relevance.