Bitcoin Faces Potential Chain Split as BIP110 Soft Fork Looms

Bitcoin is facing a soft fork attempt through BIP110, which would limit the size of OP_RETURNs and reduce other types of data on its blockchain. However, this proposal does not have consensus among developers and miners.

The Bitcoin Knots implementation has already implemented BIP110, but only 1-2% of hash power has signaled support for it in recent weeks. Most notably, Bitcoin Core, the most-used implementation, has not adopted BIP110.

There are three possible scenarios for how this could play out: If almost no miners signal, BIP110 nodes would stall and become unusable. If almost all miners signal, the upgrade would go into effect across the entire network. However, even in this scenario, there is a risk that the new rules may not be enforced by economic nodes.

If a sizable minority of miners signals, it could lead to an immediate chain split, resulting in two separate blockchains with different sets of rules. In this case, users and miners would have to decide which blockchain represents 'Bitcoin' and which is the new forkcoin.