Bitcoin Core 'damaged' as market share falls from 98% to 77%: BIP-110 upgrade controversy

Bitcoin Core’s market share has sharply declined from 98% to 77.2%, while Bitcoin Knots — a forked client version — has increased to 22.7%. This change stems from the decision to remove the 80-byte limit on the OP_RETURN feature at the end of October 2025, opening the door for non-financial transactions on the Bitcoin network.

This split is directly related to Bitcoin Improvement Proposal (BIP-110), introduced by developer pseudonym Dathon Ohm at the end of 2025. The proposal aims to temporarily limit the amount of data stored in transactions to prevent the flood of images, videos, and unrelated content.

Bitcoin Knots rises, Bitcoin Core loses dominance

This shift is no coincidence. After Bitcoin Core removed the data size limit, Bitcoin Knots nodes became the preferred choice for those concerned about data inflation. Nearly 7.5% of Bitcoin nodes now signal readiness to deploy BIP-110, mainly Bitcoin Knots clients. This marks an unprecedented power shift in Bitcoin’s history, where Bitcoin Core once dominated with over 98% market share.

Blockstream CEO criticizes ‘data limit’ initiative

Blockstream CEO Adam Back has strongly opposed BIP-110. In a post on X, he described the proposal as “an attack” on Bitcoin’s reputation as a secure monetary network. Back argued that increased data is merely a “nuisance” rather than a security threat, making consensus-level changes unnecessary.

He also warned that BIP-110 could “freeze funds” by making some unspent transaction outputs (UTXOs) unspendable. However, Dathon Ohm acknowledged this risk but emphasized that the proposal is designed to avoid affecting any known use cases.

Ordinals and Runes: can they sufficiently protect Bitcoin?

Advocates of non-financial transactions, such as Bitcoin Ordinals leader Leonidas, emphasize that the Ordinals and Runes ecosystems have contributed over $500 million in transaction fees. They argue that these contributions are strengthening Bitcoin’s security as block rewards diminish.

However, data from Dune Analytics since late 2025 tells a different story. Ordinal inscription fees generate less than $10,000 daily for miners, challenging claims of long-term economic contribution. Ordinal activity peaked over two years ago, with miners collecting nearly $10 million in fees on December 16, 2023, but fees have generally declined since then, with only occasional spikes.

This debate reflects a deeper issue: Bitcoin faces a trade-off between becoming a “sound money” and maintaining security through diverse transaction fees. As Bitcoin Core’s dominance wanes to 77.2%, the question of who will steer the network’s future no longer has a clear answer.