The controversial BIP-110 Bitcoin fork has produced only two blocks after splitting from the main chain. With very little mining power supporting it, the breakaway chain now faces long block times and potential replay-attack risks.
BTC$78,405.00-1.02%The controversial BIP-110 Bitcoin fork has produced only two blocks after splitting from the main Bitcoin network, with little sign that enough miners will continue supporting the breakaway chain.
The minority chain went live after computers running BIP-110 software began rejecting blocks that did not signal support for the proposal.
However, the new chain inherited Bitcoin's existing mining difficulty while receiving only a very small share of the network's total hash power.
As a result, blocks on the BIP-110 chain are arriving far more slowly than on the main Bitcoin network.
The split began at Bitcoin block 961,632.
Around eight hours later, the BIP-110 chain had only reached block 961,633, while the main Bitcoin blockchain had continued to advance significantly.
This means the breakaway chain produced only two blocks while the main Bitcoin network continued processing dozens of additional blocks.
Under normal conditions, Bitcoin aims to produce a new block roughly every 10 minutes.
The BIP-110 chain is struggling because it has inherited the same mining difficulty as Bitcoin but has only a tiny fraction of the mining power.
Without enough miners, finding new blocks becomes extremely difficult.
BIP-110 is a proposed change to Bitcoin that aims to limit the storage of images, text and other non-financial data inside Bitcoin transactions for one year.
Supporters argue that Bitcoin's block space should mainly be used for financial transactions.
They believe that storing large amounts of non-payment data could increase network congestion and make transactions more expensive.
Opponents take a different view.
They argue that users who pay Bitcoin transaction fees should be free to use block space however they choose, as long as the transactions follow Bitcoin's existing rules.
The disagreement created enough tension for some users running BIP-110 software to reject blocks accepted by the rest of the Bitcoin network.
The split occurred because BIP-110 required miners to signal support for the proposal.
The proposal needed strong mining support to activate normally. However, only a small percentage of Bitcoin blocks were signaling for BIP-110.
At block 961,632, BIP-110 nodes began rejecting blocks that did not contain the required signal.
This created two different versions of the blockchain. The main Bitcoin chain continued accepting blocks under the existing rules.
Meanwhile, BIP-110 nodes followed a separate chain containing only blocks that matched their requirements.
Mining pool AntPool produced the first block that the main Bitcoin network accepted but BIP-110 nodes rejected.
A miner using Ocean then produced the alternative block followed by the BIP-110 chain.
The biggest problem facing the new chain is Bitcoin's mining difficulty.
Bitcoin automatically adjusts its mining difficulty every 2,016 blocks. This system helps maintain an average block time of around 10 minutes.
However, the BIP-110 chain inherited Bitcoin's existing difficulty level.
That difficulty was designed for the full Bitcoin mining network, but the breakaway chain only has a very small amount of hash power.
As a result, miners on the BIP-110 chain may need several hours to find a single block. The chain cannot significantly adjust its difficulty until it completes 2,016 blocks.
At its current pace, that could take close to a year. Meanwhile, the main Bitcoin network would normally complete the same number of blocks in about two weeks.
This creates a serious challenge for anyone hoping the minority chain can operate as a functioning alternative Bitcoin network.
BIP-110 entered the split with very little support from Bitcoin miners.
Only around 2.53% of blocks signaled support for the proposal over the previous two weeks.
That was far below the 55% threshold required for the proposal to activate without creating a split. The low level of support explains why the new chain has struggled to continue producing blocks.
Without additional miners joining the network, the chain could remain extremely slow or stop advancing altogether.
The slow-moving chain also creates a risk for Bitcoin holders who attempt to sell the coins created on the minority fork.
Because both chains initially share the same transaction history, users may hold the same balance on both chains after the split.
However, the chains still accept identical transactions.
This means a transaction signed to sell coins on the BIP-110 fork could potentially also be valid on the main Bitcoin network.
A buyer could attempt to replay that transaction on the main chain and receive real BTC from the seller.
Related: Before the fork appeared, we explained how a BIP-110 chain split could expose Bitcoin holders to replay attacks, allowing a transaction meant for forked coins to potentially be replayed on the main Bitcoin network. Read: Bitcoin holders could lose real BTC in a BIP-110 fork replay attack.
The replay risk is not the only problem. With blocks arriving several hours apart, transactions on the BIP-110 chain could take a long time to receive confirmation.
This makes trading the forked coins even more complicated.
A buyer or seller may have to wait hours for a transaction to be confirmed, while the value of the minority-chain coin remains uncertain.
If mining activity continues to decline, the chain could become even slower.
The result is a difficult environment for anyone trying to treat the forked coins as immediately tradeable assets.
The BIP-110 chain still has a limited window during which its nodes require blocks to signal support for the proposal.
That period is scheduled to continue until block 963,647. However, at the chain's current speed, it may not reach that block for a very long time.
The main Bitcoin network, meanwhile, continues operating normally. For now, the BIP-110 fork remains a small and slow-moving minority chain with very limited mining support.
The situation also reinforces the warning for Bitcoin holders: do not rush to move or sell forked coins unless you fully understand the replay risks involved.
Until the two chains can safely separate transactions, doing nothing may remain the safest option for users who are unsure how the fork affects their Bitcoin holdings.
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