Bitcoin reached block 961,632 at approximately 19:35 UTC on Saturday, beginning a mandatory-signaling period for BIP-110, a proposed soft fork intended to restrict certain forms of non-payment data on the ledger.

Miner participation remained at roughly 2.6% as the period began, far below the 55% threshold established for an early lock-in. 

The low figure indicates that most of Bitcoin’s computing power has not adopted the proposal, although BIP-110’s activation design allows participating node operators to begin enforcing its signaling requirement without majority miner support.

From block 961,632 through block 963,647, nodes running BIP-110 reject blocks that do not signal support by setting version bit 4. 

Nodes using the prevailing Bitcoin rules continue to accept both signaling and non-signaling blocks and follow the chain with the greatest accumulated proof of work.

That difference creates two possible outcomes for BIP-110 users. Their nodes could stop advancing if no compatible blocks are mined, or they could follow a separate chain if a small group of miners continues producing signaling blocks. 

Given the limited support recorded before the deadline, any such chain would initially have only a fraction of the hash power securing the main Bitcoin network.

Michael Saylor, executive chairman of Strategy, stated that BIP-110’s limited miner support would likely cause it to stall or become an insignificant minority fork, while the main Bitcoin network continues normally.

The proposal, formally titled the “Reduced Data Temporary Softfork,” would impose additional consensus limits on transaction data for approximately one year. 

Among other changes, it would cap most data pushes and certain witness items at 256 bytes, limit standard output scripts while permitting OP_RETURN outputs of up to 83 bytes, and temporarily restrict several Taproot features. 

Coins mined before activation would be exempt from the new spending restrictions. The complete rules and deployment schedule are set out in the official BIP-110 specification.

Supporters argue that inscriptions and other data-intensive transactions impose continuing storage and bandwidth costs on node operators after miners have collected a one-time transaction fee. 

They contend that temporary limits would help contain those costs and reinforce Bitcoin’s primary role as a monetary network.

Opponents argue that users should be free to purchase block space for any transaction that complies with Bitcoin’s existing consensus rules. 

They have also warned that the proposal could establish a precedent for restricting permitted activity and could interfere with experimental applications that rely on some of the Taproot functions BIP-110 would temporarily constrain.

JAN3 CEO Samson Mow questioned whether miners would accept the financial risk of supporting a low-hash-rate BIP-110 chain.

Mow stated that a signaling miner could forgo the opportunity to earn a block reward on the dominant chain, while coins generated on a lightly supported alternative chain could have uncertain value.

BIP-110 supporters have compared the strategy to BIP-148, the user-activated soft-fork campaign associated with Segregated Witness in 2017. 

Under BIP-148, participating nodes were prepared to reject blocks that did not signal for SegWit. 

SegWit ultimately locked in before that enforcement became necessary, however, making the earlier episode an imperfect comparison with the present dispute.

Under BIP-110’s schedule, mandatory signaling ends when the software enters its locked-in state at block 963,648. 

The proposed data restrictions would then take effect at block 965,664, approximately one difficulty-adjustment period later, and remain active for 52,416 blocks (about one year).

For users remaining on the chain backed by most miners, the signaling period does not itself alter Bitcoin’s transaction rules.