Bitcoin Miner Simple Mining Rejects BIP-110 Despite Pool's Support

A recent controversy surrounding Bitcoin Improvement Proposal 110 (BIP-110) on the Bitcoin network has taken a new turn with a miner acting contrary to its pool's default stance. Ocean mining pool had been signaling support for BIP-110 by default, but Simple Mining, a miner operating through Ocean, utilized the pool's DATUM protocol to independently reject the proposal and continued mining blocks on the Bitcoin main chain. This incident once again highlighted the decentralized nature of Bitcoin protocol changes and the autonomy of miners.

BIP-110 was a proposed temporary soft fork aiming to restrict arbitrary, non-financial data embedded in Bitcoin transactions—such as Ordinals inscriptions, BRC-20 tokens, Runes, and oversized OP_RETURN payloads—for approximately one year. Supporters framed it as a defense of Bitcoin's role as sound money and a means to re-prioritize block space for payments, thereby reducing storage costs for node operators. Critics, however, viewed it as censorship and a potential risk for a chain split. Activation of the proposal required 55% miner support and entered its mandatory signaling window at block 961,632.

Simple Mining produced block 961,634 on the Bitcoin main chain, choosing not to signal support for BIP-110. This decision was facilitated by the miner's use of Ocean's DATUM (Decentralized Alternative Templates for Universal Mining) protocol. While mining pools typically dictate block content and software signals, DATUM empowers individual miners with control over these decisions. Simple Mining stated on X, “Hashrate is a vote you cannot fake, and we decided the proposal wasn't worth following.”

Despite Ocean's default support, miner backing for BIP-110 remained significantly below expectations, peaking at approximately 2.6%, far short of the required 55% threshold for activation. At block 961,632, nodes enforcing BIP-110 began rejecting blocks that did not carry the BIP-110 signal, leading to a brief chain split. However, the minority BIP-110 chain quickly stalled after mining only two blocks (961,632 and 961,633) due to insufficient hash power. Meanwhile, the Bitcoin main chain continued producing blocks at its usual pace, moving more than 200 blocks ahead of the minority fork. Ocean mining pool's hashrate also saw a dramatic decline over the weekend, falling by approximately 96.5% from about 36 exahashes per second (EH/s) to 1.25 EH/s. Ocean announced it would reimburse affected miners after a configuration issue inadvertently directed hashpower to the BIP-110 chain for 18 hours.

This development underscores the complexities of protocol changes and governance mechanisms within the Bitcoin ecosystem. The decentralized nature of Bitcoin necessitates broad consensus for significant protocol alterations. The BIP-110 case demonstrated that miners and node operators can hold divergent views, and these differences can directly impact the success of a soft fork. The proposal's failure also reignited debates about Bitcoin's censorship resistance and predictability.

Analysts and market observers suggest that the failure of BIP-110 is indicative of a strong adherence to Bitcoin's foundational principles. The rapid falling behind of the minority chain, coupled with the BIP-110 website itself directing users back to the main Bitcoin chain, proved that such divisive proposals are unsustainable without substantial consensus. Moving forward, discussions surrounding data utilization and block space allocation on the Bitcoin network are expected to continue, with miners and developers likely seeking broader compromises. This event also highlighted the limitations of the User Activated Soft Fork (UASF) mechanism in Bitcoin governance.