Bitcoin Developers Launch New Blockchain Amid Mining Algorithm Controversy

Developers supporting Bitcoin Improvement Proposal (BIP) 110 are planning to launch a separate blockchain, dubbed BLAKE2b, on September 1. This new chain will use the BLAKE2b proof-of-work algorithm instead of SHA-256d.

The original BIP-110 aimed to impose temporary restrictions on arbitrary data on Bitcoin's network but did not replace the mining algorithm itself.

However, the enforcing branch of BIP-110 separated from Bitcoin's dominant chain in August and initially produced only two blocks due to a lack of miner support. Only 2.53% of miners supported BIP-110 during its mandatory phase.

The BLAKE2b fork is not simply an activation of BIP-110 on the existing Bitcoin network but a separate hard fork with its own proof-of-work system and resulting asset.

Supporters of the new chain argue that it will allow them to establish a new mining group without relying on operators securing Bitcoin's dominant chain. Nevertheless, existing Bitcoin mining equipment is designed specifically for SHA-256 and cannot automatically redirect its computing power to BLAKE2b.