While Bitcoin was trying to exceed the $60,000 threshold again, a new split discussion within the network came to the fore. The proposal, called BIP 110, aims to limit the writing of additional data such as ordinals and NFTs into Bitcoin blocks. The proposal is planned to go into effect at the beginning of August, at a block height of 961,632.
Old debate reignited in the community
There has long been a disagreement in the Bitcoin community between payment-oriented use and writing additional data on-chain. Those who support BIP 110 argue that Bitcoin should primarily work as a payment network. According to this group, ordinals, runes and NFT transactions fall outside the main purpose of the network and create unnecessary burden.
Blockstream founder Adam Back argues that the Bitcoin network should not carry transactions that are considered spam.
Blockstream is among the leading companies developing Bitcoin infrastructure and sidechain solutions. The founder of the company, Adam Back, has long been considered one of the most well-known names in the Bitcoin ecosystem.
Ordinals and runes dominate transaction traffic
Data shows that more than 67 percent of transactions on the Bitcoin network are currently linked to ordinals and runes. While the number of daily transactions on the network exceeds 621 thousand, the daily fee income is approximately 2.3 million dollars. The fact that more than 91 percent of the blocks are occupied indicates that the idle capacity in the network remains limited.
However, there is no significant congestion in the transaction pool. Despite the slowdown in the NFT market, token issuance, production of ordinals and similar records continues. Therefore, some users see these transactions as legitimate and believe that they support the economic activity of the network.
Support for BIP 110 appears limited
Supporters of the proposal expect enough nodes to adopt the update. However, current signals indicate that support on the part of miners and nodes remains quite limited. This picture strengthened the comments that the Bitcoin network may not move in a single direction, despite the activation date at the beginning of August.
In one possible scenario, miners can continue to produce normal blocks. At the same time, the party adopting BIP 110 can also start approving blocks that comply with its own rules. In such a case, the Bitcoin network could effectively split into two different versions, between the chain that continues to carry ordinals transactions and the alternative chain that enforces stricter rules.
This possibility has brought back to the agenda the hard fork period in which the Bitcoin Cash split took place in the past. However, if BIP 110 cannot reach broad consensus, it is also possible that it will continue on its way with limited support or that block production will weaken over time.
Attention warning for wallet users came to the fore
It is considered that the most notable risk in the short term may arise from the user side. There is a possibility that some Bitcoin wallets may not work properly around the activation date. It is stated that the Bitcoin Knots wallet, especially mentioned in the BIP 110 package, may also experience problems and some coins may become temporarily unspendable.
Mini dictionary: Bitcoin Knots is an alternative client to the Bitcoin software. It can be used on nodes that verify network rules and may have some different policy preferences than Bitcoin Core.
Therefore, as the early August block height approaches, users are expected to be more cautious when sending transactions and checking wallet compatibility.
