Bitcoin faces August chain split risk as Saylor fights BIP-110

Michael Saylor, executive chairman of Strategy, published a 110-point essay on Saturday urging the Bitcoin network to reject BIP-110. The proposed soft fork would temporarily restrict arbitrary data on the blockchain.

The intervention comes as the proposal approaches a critical August activation window with minimal industry backing. If enforcing nodes begin rejecting blocks produced by the majority of miners, the network faces a real risk of a temporary chain split.

Originally published as BIP-444 in October 2025, the proposal bundles seven restrictions on data-heavy transactions following Bitcoin Core's v30 release, which lifted default OP_RETURN data limits. A mandatory signaling period opens around Aug. 7 at block 961,632, requiring 55% miner support to lock in early. Currently, signaling stands at just 0.86%, a figure that has never exceeded roughly 1%.

Despite low support, the deployment schedule dictates that BIP-110-enabled nodes will start rejecting non-signaling blocks during the August window. Jason Hughes, Ocean's vice president of development and engineering, estimated node support between 7% and 15%, acknowledging the proposal is on track to fail. If signaling remains depressed, this dynamic would effectively force a minority chain split.

Saylor argued that consensus rules should not attempt to judge the intent of valid, fee-paying transactions. He stated that objectors can simply choose not to relay, index, or mine unwanted data, warning against rules targeting perceived misuse rather than demonstrated denial-of-service risks. "Bitcoin does not need guardians of purity. It needs guardians of neutrality," he wrote.

Supporters, including Ocean CTO Luke Dashjr, counter that treating arbitrary data storage as a supported use case distorts miner incentives and forces monetary transactions to compete with non-financial traffic. Investor Fred Krueger responded to Saylor's essay with a mirror-image rebuttal listing 110 reasons in favor of the restrictions.

Saylor’s entry into protocol governance is a rare move for the executive. Strategy holds 843,775 bitcoin, purchased at an average cost of $75,476 as of a July 12 SEC filing. The firm's holdings are currently valued at roughly $54.28 billion, representing an unrealized loss of about $9.4 billion.

Following his governance post, Saylor shared a chart of Strategy's holdings on Sunday with the caption "What's next?" The post drew nearly a million views, though recent weekend tracker posts have proven unreliable predictors of the company's Monday SEC disclosures.