Bitcoin has failed to activate every proposed soft fork since Taproot activated in November 2021, according to LayerTwo Labs CEO Paul Sztorc. The latest failure came with BIP-110, a temporary soft fork that sought to restrict non-financial data storage in Bitcoin transactions. The proposal attracted only 2.53% miner support during its activation period, with enforcing nodes splitting from the dominant Bitcoin network at block 961,632 on August 8. The minority branch produced only two blocks before stalling completely, while the main chain continued processing blocks normally.
BIP-110, formally called the Reduced Data Temporary Softfork, proposed seven consensus restrictions lasting 52,416 blocks (approximately one year at Bitcoin's normal block rate). The rules included an 83-byte cap on OP_RETURN outputs, a 256-byte limit on certain data pushes, and restrictions affecting some Taproot functions. The proposal required 55% block signaling support but became mathematically unreachable by August 2, when only 28 of the first 1,108 blocks had signaled support. By August 9, the minority branch remained frozen at block 961,633 as the main chain moved 111 blocks ahead, with approximately 99.85% of Bitcoin's hash power remaining with the dominant chain.
The Coinbase Bitcoin Premium Index has remained negative for 48 consecutive days as of Sunday, marking its longest streak on record since May 19. According to Coinglass data, the index has been below zero since May 19, with the latest reading at -0.0911%. Since early May, the index has recorded only one positive day - a brief green bar in mid-May - while all other sessions have witnessed Bitcoin trading at a discount on Coinbase relative to the global average. This prolonged negative premium signals persistent selling pressure from U.S. investors, as Coinbase serves as the main venue for U.S. professional and institutional buyers.
Bitcoin's price traded near $62,000 on Sunday, down more than 30% on the year and about 50% from its October high. The current run of negative premiums is longer than the previous record of 40 minus days from January 16 to February 24 this year. Bitcoin ETFs have experienced significant outflows, with around $6 billion in net outflows year-to-date, according to Galaxy's Alex Thorn. Total net assets in spot Bitcoin ETFs now stand at $74.37 billion, down from peaks above $150 billion, with June recording one of the heaviest months for outflows on record.
Sztorc cited OP_CAT as an example of the consensus barrier, describing it as 'just 13 lines of code' that was in Bitcoin's original software and had attracted developer support. 'Nothing can — not even OP_CAT, which is just 13 lines of code and was in the original software and had lots of support,' he stated when asked about BIP 300's prospects. Other proposals face similar coordination problems, including BIP-360, which proposes new output types for post-quantum signatures. Sztorc concluded that 'Bitcoin cannot activate any soft forks, for the foreseeable future' due to the current resistance to consensus changes.
