In early March, Luke Dashjr, the long-time Bitcoin Core contributor and maintainer of the Bitcoin Knots client, quietly pushed a rule change into his software that would reject any block containing data that wasn't strictly monetary. The change, aligned with his BIP-110 proposal, is a soft fork intended to ban Ordinals inscriptions and other non-financial data. The immediate effect is negligible—Knots runs on perhaps 1 in 5 nodes. But the intended effect is a bomb set to go off in August, when Dashjr says he will refuse to relay blocks that violate the rule, effectively enforcing it network-wide. The market barely blinked. But beneath the surface, a far more dangerous chain of events is coalescing: a governance crisis that could fragment Bitcoin itself.
BIP-110 is not a technical masterpiece. It is a one-line rule: prohibit data that doesn’t fit the definition of a valid Bitcoin transaction—no arbitrary data storage. The stated goal is to reduce “blockchain bloat” from Ordinals, which have pushed transaction fees higher. The hidden goal is ideological: to enforce a narrow, digital-cash-only vision of Bitcoin. Dashjr has been fighting this battle for years. In 2014, he was discovered to have hardcoded a blacklist in the Gentoo package manager without community consultation—an incident now weaponized against him. But the current fight is different. BIP-110’s activation threshold is set at 55% miner support, far below the typical 95% for uncontroversial soft forks. This is a deliberate design choice: it allows a small, motivated minority to force a rule change on the majority. The proposal has less than 1% miner support. Yet Dashjr is proceeding.
Core: The Mechanism of a Forced Split
The heart of the matter is not the technical merit of BIP-110—it is the governance mechanism. Bitcoin’s upgrade process has always been bottom-up: broad consensus among miners, node operators, and users before activation. SegWit, the last major soft fork in 2017, passed with overwhelming support after a long debate and a user-activated soft fork (UASF) that was itself a last resort. BIP-110, by contrast, has no such backing. The 55% threshold is a design anomaly, effectively a signal that Dashjr intends to bypass consensus.
Here is the technical risk: If Dashjr’s Knots nodes begin to reject blocks that contain Ordinals data, miners who produce those blocks will see their blocks orphaned by the Knots minority. This is a UASF. For the UASF to succeed, enough economic users (exchanges, wallets) must follow the minority chain, forcing miners to switch or be left on a chain with reduced liquidity. In 2017, that worked because the majority wanted SegWit. In 2025, miners derive significant revenue from Ordinals fees, and the majority of the ecosystem (including MicroStrategy’s Michael Saylor and Blockstream’s Adam Back) has publicly opposed BIP-110. A UASF today would not bring unity; it would create two chains, each claiming to be the real Bitcoin. Adam Back warned bluntly: “This will end in a fork.”
Based on my experience auditing token distribution vulnerabilities in the 2017 ICO wave, I’ve learned that a single determined developer with control over client software can introduce devastating risk. Dashjr’s control over Knots—used by a meaningful minority of nodes—gives him a lever. If he pulls it in August, the network will fracture. The two chains will share the same blockchain history up to that point. One chain, let’s call it BTC-Original, will continue with the current rules, allowing Ordinals. The other, BTC-Slim, will enforce the BIP-110 rule, rejecting new Ordinals transactions. Both will have valid blocks at different heights, the same cumulative proof-of-work for the old blocks, but diverging futures.
Contrarian: The Market’s Blind Spot
The conventional wisdom is that BIP-110 will fail—too little support, too much opposition. That view is comforting but dangerously incomplete. The market is pricing in a failed proposal, but not the fallout of the attempt. The real risk is not that BIP-110 passes, but that Dashjr’s August deadline triggers a chain split even if the proposal itself dies. The act of enforcing a rule on a minority client, without broad consensus, forces a choice that can split the chain in practice even if the technical code is binary.
Consider the CME futures. David Bailey, CEO of Bitcoin Magazine, raised the alarm that TradFi is “trapped in the same asylum” as crypto, meaning they have no idea this battle is happening. If the chain splits, CME’s cash-settled futures face a dilemma: which Bitcoin is the benchmark? The contract language typically points to the “Bitcoin” blockchain, but which one? The majority chain by hash rate? The one with the higher price? Or the one recognized by the CFTC? This is not hypothetical—the BCH fork in 2017 caused months of confusion, and that was a planned hard fork with clear camps. BIP-110, if it triggers a UASF, will be far messier because it’s a soft fork gone bad.
The hidden angle: This is not about Ordinals. It is about who holds the pen that defines Bitcoin’s rules. Dashjr’s campaign is the extreme version of a growing tension: Bitcoin’s core development is dominated by a small group of maintainers with veto power over the protocol. BIP-110 is the symptom of a governance model that concentrates power in a few hands, then resists change. The backlash against Dashjr is not just about this proposal; it’s a rebellion against the idea that one person can dictate the network’s future. Michael Saylor, Adam Back, and most of the Bitcoin elite have rallied to oppose both the proposal and the process. This is a vote of no confidence in the core development process itself.
Takeaway: The Next Narrative
The August deadline is not the end; it is the beginning. If Dashjr backs down, Bitcoin will appear stronger—a triumph of community consensus. But the underlying governance fissures will remain, festering until the next ideological fight. If he follows through, the network will split, and the resulting chaos will test the thesis that Bitcoin’s value comes from its stability. The safest bet is that the majority will prevail and BIP-110 will fail, but the market is underestimating the chain split risk from the attempt itself. Trust is the only currency that matters. Noise filtered. Signal preserved.
The question we should all be asking is not whether Bitcoin can survive BIP-110, but whether it can survive the governance model that produced it. That answer will define the next decade of cryptocurrency.