Bitcoin Faces Split as BIP110 Nears Deadline

The Bitcoin network is facing a potential split due to the implementation of BIP110, a consensus protocol change that temporarily caps the size of OP_RETURNs. The protocol change was implemented by Bitcoin Knots, but it lacks broad support from the rest of the Bitcoin community, with only around 1-2% of hash power signaling support for the upgrade.

The split could unfold in three different ways: Scenario 1, where almost no miners signal, and BIP110 nodes stall out; Scenario 2, where almost all miners signal, and every node stays compatible; and Scenario 3, a sizable minority signals, resulting in a chain split. In the latter scenario, a new cryptocurrency would be created, with holders of BTC at the time of the split receiving an equivalent amount on the new chain.

However, this creates complications, including the naming battle over which side gets to be 'Bitcoin' and which is the forkcoin. Additionally, BIP110 as it stands has no replay protection, allowing transactions on one chain to be copied onto the other.