Back then it was big blocks vs small blocks. Today it’s Bitcoin Core vs Bitcoin Knots, and the current battlefield is BIP-110 — officially titled “Reduced Data Temporary Softfork.”

We are not here to tell you how to run your node. We are here to lay out the facts, the drama, the technical guts, and why this fight matters to anyone who holds, transacts, or simply believes in Bitcoin as the hardest money ever invented.

First, the spark: Ordinals and the “data dump” problem

Since early 2023, protocols like Ordinals have let people etch everything from JPEGs and memes to BRC-20 tokens and even entire smart-contract experiments directly onto the Bitcoin blockchain. Supporters sat it’s creative, it’s permissionless, and they claim it’s undeniably fun.

But here’s the rub for many node runners: every inscription eats up precious block space and bloats the UTXO set. Full nodes (the decentralized backbone that validates every transaction) have to store and relay all of it. Storage costs rise, bandwidth gets chewed up, and running your own node becomes more expensive and less practical — exactly what Bitcoin was designed to avoid. Fees are also pushed higher than they would otherwise be, as non-monetary data crowds out genuine Bitcoin monetary transactions.

Core developers responded by loosening some relay policies, including increasing the default OP_RETURN limit. Critics saw this as tacitly endorsing the blockchain as a general-purpose data storage layer instead of peer-to-peer electronic cash. Supporters called the pushback “censorship.”

Enter BIP-110.

What is a BIP? A BIP stands for Bitcoin Improvement Proposal, the standard format developers use to propose changes to the Bitcoin protocol.

What BIP-110 actually does (in plain English, then the nerd details):

Proposed in December 2025 by developer Dathon Ohm (with early input from Bitcoin Knots maintainer Luke Dashjr), BIP-110 is a temporary, one-year soft fork.

Think of it as a one-year eviction notice for non-monetary data.

During its active period it adds new consensus rules that strictly limit how much arbitrary data can be stuffed into new transactions and outputs:

• New scriptPubKeys capped at 34 bytes (OP_RETURN gets a slightly higher 83-byte allowance).
• Data pushes and witness items limited to 256 bytes.
• Various Taproot extensions and undefined witness versions are restricted or banned.

Pre-activation coins are untouched. Lightning, payments, and normal monetary use cases expected to continue functioning normally.

After exactly 52,416 blocks (~one year), the rules automatically expire and Bitcoin reverts to business as usual.

It is deliberately temporary — a “circuit breaker” to buy breathing room while the community debates longer-term solutions. Supporters of BIP 110 also argue it serves an additional goal: to rug pull spammers and scammers.

Activation begins with a modified BIP-9 (a MASF phase), using a 55% miner signalling threshold and a hard deadline around block 965,664 (~September 1, 2026). If miners do not lock it in, supporters intend to activate it via a UASF at the deadline, though this transition relies on node coordination rather than being automatic.

The war: Core vs Knots, echoes of Blocksize Wars 2.0

This isn’t just another BIP gathering dust on GitHub. It has become a full-blown client split.

The tension didn’t start with BIP-110. It escalated when Bitcoin Core relaxed standardness limits around OP_RETURN, effectively allowing larger arbitrary data payloads. Some trace it back even earlier, when inscriptions began exploiting a Taproot-related loophole to bypass data limits, which certain developers described as a bug. Critics argue Bitcoin Core failed to properly fix it, instead adjusting documentation and policy, though this remains contested.

That move triggered backlash from node runners who saw it as mission drifts away from Bitcoin’s monetary focus.

Bitcoin Knots, long maintained by Luke Dashjr, became the natural coordination point for that opposition. It enforces stricter policy rules and rejects the trend toward accommodating non-monetary data.

The result?

Knots node share surged as operators actively switched away from Core in response to its policy direction.

Estimates suggest Knots grew from single digits to roughly 21–22% of the public network in just a few months (as of April 2026). Core still dominates at ~78%, but the shift is the largest single-client realignment since the Blocksize Wars. 

BIP-110 emerged from this environment, not as the cause of the split, but as a formal attempt to codify tighter limits at the consensus level.

Miner signalling remains extremely low so far, with the first signalling block only appearing in March 2026. While this makes activation unlikely at present, supporters argue signalling may shift closer to the deadline, as has occurred in past upgrades, though this remains uncertain.

But the node-level rebellion is real and loud, and the rhetoric is pure 2017 nostalgia:

Supporters: “This is the network defending itself against spam and restoring Bitcoin as money first.”

Critics: “Slippery slope to protocol mutability. What happens when the next group wants to ban something else?”

It’s messy, passionate, and exactly how Bitcoin governance is supposed to work — through running code, not Twitter polls.

A deeper look: governance and “The Capture”

One of the most compelling recent analyses of why this fight feels so existential comes from Hodlonaut’s March 2026 investigation “The Capture” on Citadel21. He meticulously documents how an informal network of institutions and developers gradually consolidated influence over Bitcoin Core between 2018–2021.

The piece doesn’t cry conspiracy — it simply follows the money, the mentorship pipelines, the moderation rules, and the OP_RETURN policy change that many see as the final straw that pushed node operators toward Knots.

Hodlonaut’s key takeaway: when trust erodes, the network votes with its nodes. A fifth of Bitcoin’s reachable nodes moving to alternative software in 2025 isn’t a glitch — it’s the protocol working as designed.Whether you agree with his conclusions or not, the article is required reading if you want to understand the human and institutional layer sitting on top of Bitcoin’s code.

So… is this a big deal for regular Bitcoiners?

Short answer: not yet, but it is a fascinating stress test.

If BIP-110 somehow activates, you might see cleaner blocks and marginally cheaper node operation for a year. If it fails (the base case right now), Ordinals and data experiments continue, and the debate simply moves to the next proposal.

Either way, the real winner is anyone paying attention. Because Bitcoin’s beauty is that no single team owns it. Core devs ship what they believe is best. Knots users vote with their full nodes. Miners ultimately decide what gets confirmed. And you, the sovereign holder, get to choose which software validates your money.

The takeaway remains simple: run your own node, verify your own transactions, and stay sovereign. This episode is a live reminder of why that advice still matters.