Artificial intelligence has crossed another threshold—and this time it wasn’t writing code or discovering software bugs. Anthropic says its experimental Claude Mythos Preview model has uncovered entirely new weaknesses in cryptographic algorithms themselves, a milestone that could reshape how researchers think about both AI and digital security.

The company’s Frontier Red Team revealed two significant cryptanalysis results that go beyond implementation flaws or coding mistakes. Instead of finding vulnerabilities in software, Claude helped identify mathematical weaknesses in the underlying algorithms that are designed to secure digital communications.

The findings do not put today’s encryption at risk. Bitcoin remains unaffected, modern versions of AES remain secure, and no production systems are vulnerable. Yet the implications are difficult to ignore. Just one year ago, frontier AI models were largely incapable of contributing meaningful original cryptanalysis. Today, they are producing research worthy of academic publication.

AI Moves Beyond Bug Hunting

Throughout 2026, AI has demonstrated remarkable capabilities in cybersecurity. Models have become increasingly effective at identifying software vulnerabilities, reviewing source code, and even generating working exploits under controlled conditions.

Finding implementation bugs, however, is fundamentally different from discovering weaknesses in cryptographic mathematics.

Modern cryptographic algorithms are among the most heavily scrutinized pieces of mathematics in existence. They undergo years of public analysis by academic researchers before they are ever considered for widespread adoption. Breaking—or even slightly weakening—such algorithms typically requires deep expertise in number theory, algebra, lattice mathematics, probability, and computer science.

According to Anthropic, Claude Mythos Preview has now demonstrated that frontier AI models can meaningfully contribute to this level of research.

The company’s Frontier Red Team described the work as attacks on the algorithms themselves rather than mistakes made by software developers implementing them.

That distinction is significant because implementation bugs can usually be fixed with software updates. Weaknesses in the mathematics behind an algorithm are much harder to address.

HAWK Loses Half Its Effective Security

The most notable result involves HAWK, a post-quantum digital signature algorithm that reached the third round of the U.S. National Institute of Standards and Technology’s post-quantum cryptography evaluation process.

Post-quantum cryptography aims to protect digital systems against future quantum computers, which could eventually break many of today’s public-key cryptographic methods.

HAWK was designed as one candidate capable of surviving that future.

Claude Mythos Preview reportedly discovered a previously unknown attack in approximately 60 hours that cuts HAWK’s effective security level roughly in half.

The result does not completely break the algorithm, nor does it affect deployed systems. HAWK has not become a widely adopted production standard.

Nevertheless, reducing an algorithm’s effective security by such a large margin represents a meaningful advance in cryptanalysis. For any candidate seeking standardization, newly discovered mathematical attacks significantly weaken its long-term prospects.

Anthropic disclosed the findings to the algorithm’s designers and relevant government partners before publishing the research.

Faster Attacks on Reduced AES

Claude also improved an existing attack against a seven-round version of AES-128.

At first glance, headlines claiming AI “broke AES” sound alarming. They are also misleading.

AES-128, the encryption algorithm protecting everything from banking systems to encrypted messaging applications and Wi-Fi networks, uses ten rounds of encryption.

The research targeted only a seven-round version—a deliberately weakened variant that cryptographers frequently analyze to understand an algorithm’s security margins.

Anthropic says Claude discovered improvements that accelerate the known attack by roughly 200 to 800 times.

Although impressive from a research perspective, the result does not threaten real-world AES encryption. Full AES-128 remains secure, and the newly discovered technique does not extend to the complete algorithm.

Instead, the work demonstrates that AI can contribute meaningful improvements to cryptanalytic research on problems experts have studied for decades.

Bitcoin Is Not Affected

The announcement naturally raises concerns within the cryptocurrency industry.

Fortunately, the immediate impact is essentially zero.

Anthropic explicitly stated that neither SHA-256 nor ECDSA—the two cryptographic foundations securing Bitcoin—are affected by the new discoveries.

SHA-256 continues to secure Bitcoin’s proof-of-work mining process, while ECDSA protects wallet signatures authorizing transactions.

Likewise, Ethereum and most other major cryptocurrencies are unaffected by the published research.

The HAWK attack targets an entirely different signature scheme that has never become part of mainstream blockchain infrastructure.

Similarly, the reduced-round AES research concerns symmetric encryption rather than the public-key cryptography used by cryptocurrency wallets.

For crypto investors, the findings should therefore be viewed as an indicator of future AI capability rather than an immediate security threat.

A New Era for Cryptanalysis

Perhaps the most important aspect of Anthropic’s announcement is not the specific algorithms involved but the speed at which AI produced the results.

According to the company, Claude required roughly 60 hours to identify the HAWK weakness.

The AES research took approximately one week.

Both projects required occasional human guidance rather than fully autonomous operation, but the overwhelming majority of the mathematical exploration was carried out by the model itself.

Anthropic estimates each research effort consumed roughly $100,000 worth of API computation.

Those costs remain substantial today.

Like virtually every major AI capability, however, computational expense has historically fallen rapidly as hardware improves and algorithms become more efficient.

If future generations become both stronger and cheaper, cryptographic research could accelerate dramatically.

AI Is Becoming a Research Partner

For decades, cryptanalysis has largely progressed through incremental advances produced by relatively small groups of academic specialists.

AI introduces an entirely different model.

Instead of replacing human cryptographers, frontier models may increasingly function as research collaborators capable of exploring enormous mathematical search spaces, testing hypotheses, generating proofs, and identifying unexpected attack paths.

Human researchers remain essential for validating discoveries, understanding theoretical implications, and determining whether proposed attacks have practical significance.

Claude did not independently revolutionize cryptography overnight.

But it demonstrated that AI can now contribute original ideas to one of the world’s most mathematically demanding disciplines.

That marks an important shift from earlier generations of language models, which excelled at summarizing existing knowledge but rarely produced novel scientific insights.

Security Researchers Gain a Powerful New Tool

Anthropic frames the research as a defensive capability rather than an offensive one.

Discovering weaknesses before malicious actors do has always been the foundation of modern cryptography.

The company says it privately disclosed its findings to algorithm designers, U.S. government agencies, and industry partners before releasing the results publicly.

This follows a growing trend among frontier AI developers to collaborate directly with cybersecurity organizations, software vendors, and infrastructure operators.

Rather than waiting for attackers to exploit vulnerabilities, companies increasingly hope AI can identify weaknesses early enough for researchers to strengthen systems before widespread deployment.

That philosophy aligns with Anthropic’s broader Project Glasswing initiative, which focuses on using advanced AI models to improve software security.

The cryptanalysis results represent an expansion of that effort from software vulnerabilities into the mathematics underlying digital security itself.

The Bigger Story Is AI’s Trajectory

Neither HAWK nor reduced-round AES represents an immediate crisis.

Production encryption remains secure.

Bitcoin remains secure.

Ethereum remains secure.

But the pace of progress is remarkable.

Only a year ago, frontier AI systems were not capable of producing original cryptanalytic results of this caliber. Today, they are contributing discoveries that would normally require experienced academic researchers working for weeks or months.

That trend matters far beyond the specific algorithms discussed this week.

Cryptography has always evolved alongside advances in mathematics and computing power. Artificial intelligence now appears poised to become another major force shaping that evolution.

Rather than replacing cryptographers, AI is becoming an increasingly capable research assistant—one that never tires, can evaluate vast numbers of mathematical possibilities, and continues improving with each new generation.

For the cybersecurity industry, that creates both an opportunity and a challenge. Defensive research can move faster than ever before, but so can the search for weaknesses.

The race is no longer simply between cryptographers and attackers.

It is increasingly becoming a race between AI systems working on both sides of the equation.

Bitcoin has long been described as the world’s largest untapped source of decentralized finance liquidity. More than $1 trillion in value sits on the Bitcoin blockchain, yet only a small fraction is actively used in lending, borrowing or other on-chain financial applications. The primary obstacle has always been security. Most methods of bringing Bitcoin into DeFi require users to lock their BTC with custodians or rely on cross-chain bridges that have repeatedly become targets for some of crypto’s largest hacks.

Sui believes it has found a different approach.

The Layer 1 blockchain has officially launched the Hashi testnet, introducing infrastructure designed to make native Bitcoin usable as programmable collateral while avoiding many of the risks traditionally associated with bridging assets between blockchains. If successful, the project could unlock a new chapter for Bitcoin finance by allowing institutions and developers to build financial products around BTC without compromising its security model.

Unlocking Bitcoin’s Idle Capital

Bitcoin remains the dominant cryptocurrency by market capitalization, but its role has largely been limited to that of a store of value. Unlike smart contract platforms such as Ethereum or Solana, the Bitcoin network offers only limited support for complex decentralized financial applications.

That has created a paradox.

The largest pool of digital capital in the world is also one of the least productive. While Ethereum-based assets routinely participate in lending markets, decentralized exchanges and collateralized borrowing, most Bitcoin remains dormant inside wallets or institutional custody.

Hashi aims to change that dynamic.

Originally introduced earlier this year, the protocol is designed to transform native BTC into usable collateral for decentralized financial services without requiring users to abandon the security guarantees of the Bitcoin network itself.

Rather than encouraging holders to move their Bitcoin onto another blockchain through conventional wrapped assets, Hashi seeks to provide secure on-chain infrastructure that enables lending, borrowing and credit markets to interact with native BTC.

Moving Beyond Traditional Bridges

Cross-chain bridges have become one of the weakest links in the blockchain ecosystem.

Over the past several years, bridge exploits have accounted for billions of dollars in stolen crypto assets. Many attacks exploited flaws in smart contracts, validator compromises or weaknesses in key management systems that protected locked funds.

For institutional investors, these risks remain one of the biggest barriers to using Bitcoin within decentralized finance.

Hashi attempts to reduce those concerns through a different architectural approach.

Instead of relying solely on bridge validators, the protocol introduces additional verification layers intended to make unauthorized transfers significantly more difficult. The goal is not simply to connect two blockchains but to create infrastructure that institutions can trust with high-value collateral.

While no system can eliminate risk entirely, reducing dependence on a single validation mechanism represents an important step toward stronger security.

Introducing the Guardian Layer

The centerpiece of the Hashi testnet is what Sui calls the Guardian Layer.

The security model introduces a defense-in-depth architecture built around a two-of-two multisignature requirement.

In practice, every critical action requires approval from both Hashi validators and an independent group of guardians before it can be executed.

This separation reduces the likelihood that a compromise affecting one participant could immediately threaten user funds.

Traditional bridge designs often depend on a single validator committee or multisignature arrangement. If enough validator keys are compromised, attackers may gain control over locked assets.

Hashi distributes responsibility across independent entities, requiring multiple layers of authorization before collateral can move.

For institutions managing significant Bitcoin positions, this additional verification could provide greater confidence than conventional bridge models.

Bitcoin Remains on the Bitcoin Network

Perhaps the most significant aspect of Hashi is its emphasis on preserving Bitcoin’s native security.

Instead of encouraging users to permanently relocate BTC onto another blockchain, the protocol is designed so that Bitcoin remains secured by its original network while still becoming usable within applications built on Sui.

That distinction matters.

Institutional investors have historically expressed concerns about wrapped Bitcoin solutions because they introduce additional trust assumptions beyond Bitcoin’s own consensus mechanism.

Hashi attempts to minimize those assumptions while still allowing BTC to participate in programmable financial applications.

The result is a model that seeks to combine Bitcoin’s security with Sui’s smart contract capabilities.

Why Institutions Are Paying Attention

Institutional interest in Bitcoin has grown dramatically following the approval of spot Bitcoin exchange-traded funds and increasing corporate adoption.

Yet many large investors continue to treat Bitcoin as a passive asset.

Unlocking lending, collateral management and structured credit products could significantly expand Bitcoin’s role within institutional portfolios.

Financial firms increasingly want digital assets capable of generating yield, supporting financing transactions or serving as collateral for broader investment strategies.

If infrastructure like Hashi proves secure and scalable, Bitcoin may begin functioning less like a static reserve asset and more like productive financial collateral.

That shift could increase liquidity across decentralized markets while creating entirely new categories of Bitcoin-native financial products.

A Growing Trend Toward Bitcoin DeFi

Hashi is part of a broader movement often referred to as Bitcoin Finance or BTCFi.

Rather than competing with Bitcoin, these projects seek to extend its utility by integrating it with decentralized finance while preserving its role as the underlying asset.

Several blockchain ecosystems are now racing to attract Bitcoin liquidity through sidechains, rollups, interoperability protocols and specialized infrastructure.

The opportunity is enormous.

With Bitcoin representing well over a trillion dollars in market value, even a modest percentage of active participation in decentralized finance would rival the size of many existing DeFi ecosystems.

For Layer 1 networks, attracting Bitcoin liquidity has become one of the industry’s most important strategic objectives.

Challenges Still Remain

Despite the promise, Hashi remains in its testing phase.

Security models involving multiple validators, guardians and cross-chain communication require extensive real-world testing before institutions are likely to entrust significant capital to the system.

Every additional layer of infrastructure introduces operational complexity that must be carefully audited and monitored.

Regulatory considerations also remain an important factor, particularly as institutional lending products involving digital assets continue evolving across different jurisdictions.

The long-term success of Hashi will ultimately depend not only on its technical architecture but also on developer adoption, institutional participation and a sustained security record.

A New Chapter for Bitcoin Utility

For years, the crypto industry has debated whether Bitcoin should remain purely digital gold or evolve into a more active component of decentralized finance.

Hashi represents another attempt to bridge that divide without asking users to compromise the qualities that made Bitcoin valuable in the first place.

By combining programmable infrastructure with a layered security model centered around its Guardian Layer, Sui hopes to make Bitcoin usable as collateral while leaving it anchored to the network that secures it.

Whether Hashi becomes the standard for Bitcoin finance remains uncertain. What is clear is that competition to unlock Bitcoin’s vast dormant liquidity is accelerating.

If secure infrastructure can finally bring institutional lending, borrowing and credit markets to native BTC, the next major growth story in decentralized finance may not revolve around creating new digital assets—it may come from putting the oldest one to work.

Bitcoin’s most important disputes rarely begin with price. They begin with a deceptively simple question about what the network is allowed to become.

BIP-110, a proposal to temporarily restrict the amount and type of non-financial data stored in Bitcoin transactions, has turned that question into the protocol’s most contentious governance fight in years. Supporters argue that images, tokens and other arbitrary data impose permanent costs on node operators while distracting Bitcoin from its monetary mission. Opponents warn that policing transaction content at the consensus level would damage neutrality, restrict future upgrades and risk splitting the network.

As the proposal approaches its activation window, the practical verdict appears increasingly clear. Miner signaling has remained below roughly 1%, major pools have declined to support it and prominent Bitcoin figures including Michael Saylor, Adam Back, Jameson Lopp and David Bailey have publicly opposed the plan.

BIP-110 may be losing the activation battle. The ideological conflict behind it is not going away.

From an OP_RETURN Dispute to a Consensus Fight

The origins of BIP-110 can be traced to a wider argument over Bitcoin Core version 30 and its handling of OP_RETURN, a transaction output commonly used to attach small amounts of data to the blockchain.

Bitcoin Core had historically applied a default relay-policy limit of approximately 80 bytes to OP_RETURN data. Version 30 relaxed that policy substantially, effectively allowing larger data-carrying transactions to move through nodes running the standard configuration.

That change did not alter Bitcoin’s consensus rules. It did not make previously invalid transactions valid. It changed which already-valid transactions Bitcoin Core nodes would normally relay through their mempools.

The distinction between policy and consensus is central to the current controversy.

Policy determines which transactions an individual node chooses to relay or which transactions a miner chooses to include. Different nodes can maintain different policies while still agreeing on the same blockchain.

Consensus determines whether a block is valid. When consensus rules change, nodes enforcing different rules can permanently disagree over which chain represents Bitcoin.

BIP-110 attempts to move the arbitrary-data dispute from the policy layer into consensus. Transactions that are valid under current Bitcoin rules could become invalid to nodes running the proposal.

That escalation is precisely what supporters consider necessary—and what opponents consider dangerous.

What BIP-110 Would Actually Change

Known as the Reduced Data Temporary Softfork, BIP-110 proposes a one-year restriction on several methods used to embed data inside Bitcoin transactions.

The proposal would restore an 83-byte consensus limit for OP_RETURN outputs, restrict many data pushes and witness items larger than 256 bytes, and impose additional limits on certain Taproot structures. It would also temporarily disable several currently unused or rarely used scripting mechanisms that supporters believe can be exploited for data storage.

The proposal is therefore broader than a simple attempt to stop oversized OP_RETURN messages. It affects multiple transaction structures, including some that could become useful for future Bitcoin upgrades or advanced contracting systems.

Coins created before activation would be grandfathered, reducing the risk that existing funds could suddenly become unspendable. The restrictions would automatically expire after approximately one year unless a new proposal extended or replaced them.

Supporters present this temporary design as a controlled intervention rather than a permanent redesign. The network would gain time to reduce abusive data usage, observe the effects and consider a more refined long-term solution.

Critics argue that a temporary consensus rule is still a consensus rule. Even if it expires, it can create incompatible chains, disrupt applications and establish a precedent for invalidating transactions based on how participants interpret their purpose.

The Case for Keeping Bitcoin Focused on Money

The strongest argument for BIP-110 is economic rather than cultural.

When a miner includes a data-heavy transaction, the miner receives a fee once. Every full node may then be required to download, validate and store information associated with that transaction for years.

BIP-110 supporters describe this as an externality. The person embedding the data pays the miner, but does not fully compensate the thousands of node operators carrying the long-term infrastructure burden.

They also reject the idea that the fee market automatically solves the problem. A market for permanent, globally replicated data storage is not necessarily compatible with a market designed to prioritize financial transactions. Wealthy inscription users can compete with ordinary payments for limited block space, potentially raising fees for people trying to use Bitcoin as money.

The proposal’s authors argue that Bitcoin should not become a general-purpose database. Images, documents and token metadata can be stored through specialized systems such as IPFS, BitTorrent, Nostr or conventional cloud infrastructure. Bitcoin’s scarce base-layer capacity, in their view, should remain focused on transferring and securing value.

Luke Dashjr, a longtime Bitcoin developer and a leading supporter of restrictive transaction policies, has defended this monetary-first interpretation. Ocean, the mining pool associated with Dashjr, produced some of the earliest blocks signaling support for BIP-110.

For its supporters, the proposal is not censorship. It is resource management.

Why Michael Saylor Opposes BIP-110

Michael Saylor’s intervention significantly raised the profile of the dispute.

The Strategy executive chairman acknowledged that many Bitcoiners he respects support the proposal and that concerns about arbitrary data are legitimate. His objection is directed at the proposed cure.

Saylor argues that BIP-110 transforms a disagreement about relay policy, mining policy and market incentives into a dispute over transaction validity. In his view, consensus should not be used to settle a cultural argument about which fee-paying transactions are desirable.

He escalated his opposition by publishing an extensive list of 110 objections to the proposal. His concerns include the complexity of introducing seven new restrictions, the potential effect on future scripting upgrades, the possibility of incompatible implementations and the danger of attempting activation without overwhelming agreement.

Saylor also objected to the proposal’s 55% miner-signaling threshold. Conventional Bitcoin soft-fork deployments have often targeted much higher levels of readiness because even a technically backward-compatible change can become dangerous when important participants do not enforce the same rules.

His broader position is that Bitcoin’s resistance to change is a security feature. He described hard consensus as the network’s “immune system,” arguing that controversial ideas should fail before an attempted improvement causes greater damage than the original problem.

Saylor’s influence does not give him formal authority over Bitcoin. There is no board of directors that can approve or reject a protocol change. Nevertheless, his public opposition matters because Strategy is one of the largest institutional Bitcoin holders and Saylor has become a central voice in corporate Bitcoin adoption.

His message to institutions is straightforward: Bitcoin’s credibility depends on predictable rules, not frequent intervention.

Adam Back, Jameson Lopp and David Bailey Join the Opposition

Saylor is not alone.

Blockstream co-founder Adam Back has said the network has effectively and “robustly rejected” BIP-110. He argues that participants who want stricter rules are free to operate their own fork, but should not expect the wider Bitcoin economy to recognize it as the primary network.

Back’s position reflects an important distinction in Bitcoin governance. Anyone can release software with new rules. The difficult part is persuading miners, exchanges, wallets, merchants and holders to accept the resulting chain as Bitcoin.

Security engineer Jameson Lopp has also criticized BIP-110 as technically risky and philosophically inconsistent with censorship resistance. Lopp argues that Bitcoin’s value comes partly from users being able to predict that valid transactions will remain valid without receiving social approval from influential groups.

Restrictions designed to target inscriptions could also affect sophisticated scripts that were never intended for data storage. Unknown applications are particularly difficult to protect because developers cannot test compatibility with software and transaction structures they do not know exist.

David Bailey, the chairman and chief executive of Bitcoin treasury company Nakamoto, went further by describing the campaign as a “hostile takeover attempt.” He portrayed its lack of miner support as evidence that Bitcoin’s decentralized governance successfully resisted pressure from a motivated minority.

The language has become inflammatory on both sides. Yet beneath the rhetoric is a legitimate disagreement over whether Bitcoin should defend neutrality by refusing to classify transaction content—or defend decentralization by preventing users from forcing unwanted data onto node operators.

Miner Support Has Barely Materialized

Despite months of campaigning, BIP-110 has failed to attract meaningful mining support.

Ocean has signaled for the proposal, but the largest mining pools have not followed. Across monitored signaling periods, support has remained below approximately 1%, far from the proposal’s 55% threshold.

Node adoption has also remained limited and is concentrated largely among users of Bitcoin Knots, an alternative node implementation that offers more restrictive filtering controls than Bitcoin Core.

These figures do not constitute a perfectly democratic vote. One visible node does not necessarily represent one person, one company or one unit of economic influence. Nodes can be hidden, duplicated or temporarily connected. Miner signaling is also usually controlled by pool operators rather than every individual machine contributing computing power.

Nevertheless, support this low sends a clear coordination signal. The major infrastructure participants are not preparing to enforce BIP-110.

Calling the proposal officially defeated would still be premature. Its activation mechanism contains a mandatory-signaling phase intended to force a decision before the deadline. Nodes running the BIP-110 software would begin rejecting blocks that fail to signal during that period.

With broad support, such a mechanism could pressure miners to coordinate around the new rules.

Without broad support, the same mechanism could isolate BIP-110 nodes on a minority chain.

What Bitcoin Miners Actually Do

The debate has also exposed confusion about the role of miners in Bitcoin governance.

Miners collect transactions, arrange them into candidate blocks and perform the proof-of-work calculations required to add those blocks to the blockchain. They usually prioritize transactions offering the most attractive fees, although pools can apply additional filtering policies.

Mining pools can also place signals inside block-version fields to indicate readiness for proposed rule changes. BIP-110 uses one of these version bits.

However, miners do not possess unilateral power to rewrite Bitcoin’s rules.

Full nodes independently validate every block. A miner that creates a block violating the rules enforced by the wider network will see that block rejected, regardless of how much electricity was used to produce it.

At the same time, full nodes cannot force miners to create blocks under new rules merely by installing different software. When only a small minority enforces stricter conditions, those nodes may reject the dominant chain while the rest of the economy continues without them.

This creates a balance among miners, developers, node operators and economic users.

Developers propose and publish code. Nodes choose which code to run. Miners decide which valid transactions to include and which chain to extend. Exchanges, businesses and holders determine which chain has economic value.

No group controls the system independently. Successful changes usually require coordination across several of them.

Miner signaling is therefore not a binding election. It is a public indication of readiness and an important measure of whether a rule change can activate without operational chaos.

The 55% Threshold Is the Most Dangerous Number in the Debate

BIP-110 requires 1,109 signaling blocks within a 2,016-block adjustment period, equivalent to approximately 55%.

Supporters justify the lower-than-usual threshold by noting that the proposal is temporary and addresses what they regard as an urgent threat. Waiting for near-universal agreement, they argue, would allow arbitrary-data ecosystems to become more deeply embedded and politically difficult to remove.

Opponents see the threshold as evidence that the proposal lacks the caution required for consensus changes.

A rule supported by 55% of recent blocks could still leave a large minority of miners producing blocks rejected by upgraded nodes. Exchanges could suspend deposits, wallets might follow different chains and users could face uncertainty over which transactions were final.

Bitcoin has survived previous protocol conflicts, including the block-size war and the activation of Segregated Witness. The lesson many participants drew from those episodes was not that contentious forks are harmless, but that changes require strong coordination among users, miners and businesses.

BIP-110 has not demonstrated anything close to that alignment.

What Happens Next

The proposal’s mandatory-signaling period is scheduled around blocks 961,632 through 963,647. It is designed to produce lock-in by block 963,648, with enforcement of the new transaction rules expected around block 965,664.

Under the BIP-110 schedule, the restrictions would then remain active for 52,416 blocks, approximately one year.

The code can reach those heights regardless of political support. The crucial question is which chain the economy will follow.

With miner signaling still negligible, the most likely outcome is that the dominant Bitcoin chain continues under existing consensus rules. Nodes enforcing BIP-110 could then separate from it if they reject non-signaling blocks or blocks containing transactions prohibited by the proposal.

That would not automatically create a valuable competitor. A minority chain needs mining power, liquidity, exchange support, wallet infrastructure and users willing to assign value to it.

Without those elements, it becomes an ideological fork with little economic activity.

A dramatic shift in support remains technically possible, but the window for such a reversal is narrowing. Major mining pools would need to change position rapidly, and economic participants would need to demonstrate that the signaling represented more than temporary coordination.

Bitcoin’s Governance Is the Real Story

BIP-110 is often described as a battle over spam, Ordinals or images stored on the blockchain. Those are only the visible triggers.

The real dispute concerns who gets to define legitimate Bitcoin use.

Supporters believe Bitcoin must actively defend its monetary purpose or risk becoming an expensive permanent storage system for applications that could operate elsewhere. Opponents believe Bitcoin protects its monetary value by refusing to let developers or social majorities classify valid transactions according to subjective intent.

Both sides claim to be defending decentralization. They disagree on what decentralization requires.

For BIP-110, the immediate numbers are unforgiving. Miner support remains negligible, node adoption is limited and several influential figures have publicly rejected the proposal. Unless that changes rapidly, the attempt to restrict arbitrary data through consensus is likely to end in failure or a small minority fork.

But the pressure that produced BIP-110 remains. Bitcoin will continue attracting inscriptions, tokens, experimental protocols and uses its earliest supporters never anticipated.

The network may reject this particular solution. It has not resolved the underlying question.

Bitcoin still has to decide whether neutrality means accepting every valid fee-paying transaction—or whether preserving neutral money sometimes requires saying no to everything else.