BIP-110 – Insights for Miners

This article is a guest post by Jason Hughes, Vice President of Development and Engineering at Ocean Mining. The views expressed herein are solely those of the author and do not necessarily represent those of BTC Inc. or Bitcoin Magazine. This article initially appeared on X.com and is published with permission from the author.

The author’s stance towards BIP-110 does not align with either advocacy or opposition. Should the proposal gain genuine consensus across the network and be enforced by a majority, it would be accepted. The author acknowledges that this may occur, aligning with the network’s will. However, current metrics do not indicate a promising trajectory for its success.

There exists a considerable amount of misleading information regarding BIP-110, particularly concerning mining. Key points of clarification include: BIP-110 is not inevitable; it has the potential to fail; it poses a risk of chain splits in the presence of a minority hash rate; and miners not supporting BIP-110 are not mining “invalid” blocks merely due to the existence of an undeclared proposal. The need to underscore these points reflects a concern within the community.

The author initially intended to provide an extensive analysis of mining conditions and implications, realizing such a document had been prepared previously but remained unpublished. Upon updating it, the content is now shared in a personal capacity.

This document was authored months ago, aiming for neutrality to serve as a corporate communication. As that ambition did not materialize, the information is presented now as a personal perspective. Miners are urged to stay informed without the embellishments or misleading claims propagated by certain proponents of BIP-110. Vigilance and personal judgment in decision-making are essential.

Although there is misleading information on both sides of the debate, the premature and exaggerated claims from BIP-110 supporters have been particularly striking. The author recommends that miners signal support for BIP-110 if they are in favor. Conversely, if miners are against it or indifferent, they should refrain from signaling and closely monitor developments around block 961632.

Should major mining pools continue to produce non-signaling blocks, it is likely they will not retroactively abandon substantial potential earnings to support BIP-110. If such pools do begin to signal support, miners are advised to consider adjustments to align with the heaviest chain. Ultimately, the struggle for consensus threatens to lead to a scenario where either BIP-110 prevails, resulting in the failure of non-supportive miners, or conversely, BIP-110 fails, allowing non-BIP-110 miners to succeed.

Next, the author will present a concise rationale for their perspective.

QUICK FACT: Between 7 and 15% of Bitcoin Nodes are signaling support for BIP-110.

The accuracy of node count signaling support fluctuates based on various centralized tracking tools, with the author’s independent analysis suggesting a significantly lower figure. Regardless, it is acknowledged that even 15% cannot be considered a majority.

“But Jason! UASF enabled Segwit activation with fewer nodes!”

Indeed, Segwit received backing from a wide variety of stakeholders, including miners, merchants, and users, who wanted its implementation. Unlike BIP-110, Segwit’s support was marked by substantial community and economic consensus. For reference, Segwit commenced its UASF journey with approximately one-third of the network’s hashrate already indicating approval. This kind of support does not currently exist for BIP-110.

QUICK FACT: 0.6% of blocks over the last 60 days have indicated support for BIP-110.

This figure starkly contrasts even Segwit’s initial backing. While there has been a slight increase in support recently, it remains largely unchanged, primarily originating from a single proponent by means of rented hash rate.

It is important to note that mining BIP-110 signaling blocks via DATUM on OCEAN incurs minimal risk until the specified fork point at block 961632, ensuring the recoupment of investment costs.

The capability to validate such signals is a beneficial development; however, the associated risks and rewards must be considered within the broader operational context.

“But Jason! Miners have no motivation to signal until the last moment!”

The author finds no sufficient evidence to uphold this assertion. It is not advisable for mining pools to destabilize the network for short-term gains. Early signaling is critical for effective coordination and seamless upgrades, making last-minute decisions counterproductive.

The author conducts monitoring of various nodes across mining pools, exchanges, and merchants, most of which have been authorized for observation.

QUICK FACT: All major mining pools under observation are currently operating on variants of Bitcoin Core v30 or v31 (with the exception of OCEAN).

Most mining pools have updated their software post-BIP-110’s release and the launch of Knots 29.3. Additionally, many pools customize their node software to meet specific operational requirements. Transitioning to a BIP-110-compatible client involves considerable testing and evaluation, and currently, evidence suggests this is not being pursued by these pools.

It appears these pools are aware of BIP-110 but are choosing to disregard it.

“But Jason! Miners do not determine consensus! Nodes do! Otherwise, they can simply cancel halvings!”

This belief prevalent among BIP-110 advocates is misguided. The comparison between a soft fork that can be enforced by miners and a hard fork rejected by existing nodes is intellectually dishonest. Tightening rules such as those proposed in BIP-110 can be enacted through miner consensus, whereas loosening rules, such as abolishing a halving, necessitates universal agreement from all nodes, which is highly improbable.

“But Jason! If you do not upgrade to the latest consensus rules, you could be insecure! You will lose funds! You will mine invalid blocks! You’ll [insert additional hyperbole here]!”

Such concerns are valid only when there is a clear consensus supporting the proposed changes. BIP-110 has yet to achieve demonstrable majority support, as evidenced by the current lack of backing in nodes, hashrate, or social sentiment.

Should BIP-110 manage to secure over 51% of the network’s hashrate by or before block 961632, it would then be enforced, as a majority could mandate its adoption through a soft fork, albeit under circumstances that may mirror a hard fork.

“But Jason! It cannot gain consensus without already having consensus! You must give it an opportunity!”

The author does not share this obligation, though they have given BIP-110 ample consideration. The proposal’s pace suggests a rushed approach without adequate community engagement. Nearly seven months have elapsed since the release of the initial BIP-110 client, with only three weeks remaining before mandatory signaling proposes to commence. The lack of significant support during this period diminishes the likelihood of rapid acceptance.

“But Jason! CSAM! CSAM! Pedophiles! CSAM!”

The author acknowledges having previously overstated the associated risks following Bitcoin Core’s OP_RETURN modification proposal. While the potential for misuse exists, the evidence to date does not substantiate these fears in the context of BIP-110.

The author unequivocally opposes the inclusion of CSAM in the blockchain; however, a lack of support for BIP-110 does not equate to complicity.

Concluding Remarks

This discourse could easily extend further, but will now be concluded. The author recognizes that neither side of the BIP-110 debate may appreciate their neutrality, potentially inviting criticism from both factions.

Overall, the author finds it imprudent to address valid issues, such as the OP_RETURN modification within Bitcoin Core, through a proposal that lacks efficacy against spam and unrelated data.

While conceding that future developments could prove the author wrong, they maintain that data analysis suggests a success probability for BIP-110 below 5%, which is considered optimistic. Readers are encouraged to regard this perspective cautiously, carefully evaluate data, and prioritize decisions that sustain their mining revenue without falling prey to exaggerated narratives from either side.

A link to the original document referenced is provided for ease of access.

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