This article presents an analysis of BIP-110, a proposed Bitcoin Improvement Proposal, authored by Jason Hughes, VP of Development and Engineering at Ocean Mining. The opinions expressed are those of the author and do not necessarily reflect the views of BTC Inc. or Bitcoin Magazine. This piece was originally published on X.com and is reproduced here with the author’s permission.
The debate surrounding BIP-110, a significant proposed change to the Bitcoin protocol, has ignited considerable discussion within the cryptocurrency community, particularly among miners who play a crucial role in network consensus. Jason Hughes, a prominent figure in the mining industry, has shared his perspective, offering a detailed assessment that challenges some of the prevailing narratives. Hughes emphasizes a pragmatic approach, urging miners to rely on observable data and to exercise caution against what he describes as misleading information from proponents of the proposal.
At its core, BIP-110 aims to address concerns related to the arbitrary storage of data within Bitcoin transactions. While the exact technical specifications and motivations behind BIP-110 are complex, its potential impact on the network’s functionality and future development has become a focal point of discussion. Hughes’s commentary suggests that the proposal is far from achieving the widespread consensus necessary for its successful implementation and warns of potential risks for those who choose to adopt it prematurely.
The Current State of BIP-110 Consensus
Hughes begins by stating his neutral stance on BIP-110, emphasizing that its ultimate fate hinges on network-wide consensus. He asserts that if the proposal garners sufficient support to be enforced by a majority of the network, it will be adopted, and all nodes, regardless of their explicit support for BIP-110, will ultimately align with the dominant chain. However, he critically notes that current metrics do not indicate such widespread adoption, nor do they suggest a trajectory towards it.
"Unfortunately for proponents of the proposal, that simply isn’t currently the case by any measurable metric, nor does it appear to have a trajectory suggesting that will change, either," Hughes states, underscoring the lack of demonstrable network-wide buy-in.
He directly confronts what he terms "misleading information" about BIP-110, particularly concerning its implications for miners. Hughes provides a series of bullet points designed to counter what he perceives as hyperbole:
- BIP-110 is NOT inevitable: Contrary to claims of its assured success, Hughes argues that the proposal can and is likely to fail.
- BIP-110 CAN fail: The technical and social consensus required for a Bitcoin soft fork is not guaranteed.
- BIP-110 can and will cause a chain split/fork in a minority hashrate situation: If a significant portion of the network’s mining power does not adopt BIP-110, it could lead to a contentious fork, resulting in two separate blockchains.
- BIP-110 is NOT without risk to miners choosing to adopt it: Miners signaling for BIP-110 face potential risks if the proposal does not achieve majority support.
- Miners not supporting BIP-110 are not suddenly mining “invalid” blocks: A proposal that is not yet adopted does not retroactively invalidate blocks mined by non-adhering miners.
- You are not a bad person or evil simply because you don’t like or support BIP-110: Hughes expresses dismay that this point even needs to be articulated, suggesting a level of acrimony in the debate.
Historical Context and Miner Education
Hughes reveals that he had previously authored a comprehensive document intended as an educational piece for miners regarding BIP-110. This document, originally conceived for publication by OCEAN, was delayed and has now been updated and released as a personal resource. He stresses that the document was written with an aim for agnosticism to be corporately acceptable, an effort that ultimately failed.
The updated document, he explains, is intended to provide miners with the unvarnished facts needed to make informed decisions about their operations, free from the "sugarcoating and, frankly, outright misleading information" he attributes to some BIP-110 proponents. He empowers miners to "be vigilant and decide what’s right for you."
Strategic Guidance for Miners
Hughes offers direct advice to miners navigating the BIP-110 landscape:
- Signal support if you believe in BIP-110.
- Do not signal if you do not support BIP-110 or are indifferent.
- Monitor the network closely around block height 961632. This block height is understood to be a critical point for the activation of BIP-110.
He elaborates on the significance of monitoring mining pools: "If you continue to see non-signaling blocks from major pools, you can be reasonably certain they’re not going to suddenly decide later to throw away millions of dollars’ worth of revenue to backtrack and signal for BIP-110." He advises miners to be prepared to switch to the "heaviest chain" if major pools begin signaling for BIP-110, acknowledging that realistically, "only one side can win."
Data Points Undermining BIP-110’s Momentum
Hughes presents several key data points to support his assessment of BIP-110’s lack of traction:
Node Signaling: A Minority Position
"Between 7 and 15% of Bitcoin Nodes are signaling support for BIP-110," Hughes states, citing data from various network crawlers, though he notes his private crawler indicates a lower percentage. He unequivocally concludes, "even 15% is not a majority." This figure is crucial, as nodes are the ultimate arbiters of Bitcoin’s consensus rules.
Comparison to SegWit Activation: A Different Landscape
Addressing the common argument that User Activated Soft Forks (UASFs) like SegWit succeeded with fewer nodes, Hughes draws a stark contrast. He explains that SegWit benefited from substantial economic and community support, with approximately one-third of the network’s hashrate already signaling for it before its UASF phase. This existing backing made the UASF a viable strategy to push the network over the tipping point. Hughes argues that such a foundation is absent for BIP-110.
Block Signaling: A Staggering Discrepancy
Perhaps the most striking data point is the low level of block signaling for BIP-110: "0.6% of blocks over the past 60 days have signaled support for BIP-110." Hughes contrasts this with even SegWit’s initial low baseline support, calling the figure "pretty stark." He notes that while there has been a slight increase in recent weeks, it has not come from new entrants but rather from "rented hashrate from one of the same small proponents."
Hughes also points out that mining BIP-110 signaling blocks via DATUM on OCEAN carries "virtually no risk to the miner up until the fork point," with negligible costs and a high likelihood of recouping expenses. He acknowledges the utility of this capability but urges caution in weighing its significance against the broader risk-reward perspective.
Miner Incentives and Early Signaling
Hughes dismisses the argument that miners have no incentive to signal until the last minute. He contends that it is not in a mining pool’s best interest to destabilize the network and that early signaling periods are designed for smooth coordination. "I see no compelling rationale or upside to doing so," he states, suggesting that delaying signals negates the benefits of coordinated upgrades.
Observed Behavior of Major Mining Pools
Through his personal node monitoring, Hughes observes that "All major mining pools I monitor are currently running some variant of Bitcoin Core v30 or v31 (except OCEAN)." He notes that most pools have updated their nodes since BIP-110’s release and the proliferation of newer Bitcoin Core versions. However, he finds "no evidence that this is the case currently" regarding preparations for BIP-110 compatibility. His conclusion is that "the pools are aware but ignoring."
Addressing Common Pro-BIP-110 Arguments
Hughes systematically debunks several arguments frequently made by BIP-110 proponents:
Miners vs. Nodes in Consensus
He criticizes the argument that "Miners have no incentive to signal until the last minute!" and the claim that "Miners don’t determine consensus! Nodes do! Otherwise, they’ll just cancel halvings!" Hughes labels this as "one of the funniest and most ridiculous arguments I’ve heard." He distinguishes between a soft fork, which miners can enforce, and a hard fork, which requires universal network buy-in. He states, "Tightening rules (like BIP110): Soft fork, can be enforced by miners if they choose to do so. Loosening rules (like canceling a halving): Hard fork, can not be enforced by miners without effectively 100% buy-in from the entire network… Comparing the two is, bluntly, just stupid."
Security Risks of Non-Adoption
Hughes counters the hyperbolic claims that non-upgrading miners will "lose funds" or "mine invalid blocks." He asserts, "This would be true of a consensus change that has, well, consensus." He reiterates that BIP-110 has not achieved measurable majority support from nodes, hashrate, or social layers, citing consensus.health as a resource for visualizing this. He concedes that if BIP-110 were to gain 51%+ hashrate support by block 961632, it would be enforced as a soft fork.
The ‘Give It a Chance’ Fallacy
Hughes dismisses the argument that BIP-110 needs more time to gain consensus by stating, "no I don’t, even though I have." He describes BIP-110 as a "rushed proposal that never had the time to even try and gain real consensus." With seven months since the release of the first BIP-110 client and approximately three weeks remaining until mandatory signaling, he believes it is unlikely to gain sufficient adoption.
The CSAM (Child Sexual Abuse Material) Argument
Hughes acknowledges that he "personally overstated the risk here early on" regarding the potential for BIP-110 to facilitate the storage of CSAM. However, he argues that from a technical standpoint, the same arbitrary data can be stored on either chain. He concludes, "this particular argument for BIP-110 falls pretty flat to me at this point." He firmly states, "Am I a pedophile if I don’t support BIP110? Also not."
Concluding Analysis and Outlook
Hughes concludes by reiterating his belief that BIP-110 is a flawed approach to addressing the underlying problem of arbitrary data storage. He describes it as a "maximum anti-spam manifesto based soft fork proposal… which provably cannot stop spam, arbitrary data, etc." He notes that proponents may dispute this characterization, but he maintains that their claims are not supported by evidence.
While acknowledging the possibility of being wrong, Hughes offers a stark prediction: "I give BIP-110’s success less than a 5% chance of actually succeeding… and I consider that generous." He strongly advises miners to rely on the data, remain vigilant, and make decisions that prioritize their revenue and operational stability. He urges them to resist being "gaslit by either side of the debate, and make your own decisions."
The full document referenced by Hughes can be accessed via the following link for further reference: https://docs.google.com/document/d/14DfMSVYBHTHIOmW32JTOR6BAP7AITbinvrhl8rJuvvc/edit?usp=sharing
