The Bitcoin network could split into two chains starting at block 961,632 this weekend due to the implementation of the BIP-110 proposal. Nodes running BIP-110 rules are scheduled to begin rejecting blocks without a special tag, a unilateral move that opens the way for the creation of a new minority chain outside the main chain.
The BIP-110 proposal was originally designed with one specific goal: to remove all non-payment data, such as images or text, from Bitcoin transactions for a period of one year. This cleaning rule requires approval from 1,109 out of 2,016 miner blocks, or about 55% of the total network power, to activate through the normal consensus path. In reality, support signals from miners have stalled at 2.6%, shutting down any possibility of activation through majority support.
The miner support signal halting at 2.6% means a network split is not one hundred percent guaranteed to happen - the minority chain could stop producing blocks on its own due to a lack of computational power. But for Bitcoin holders, the biggest threat is not the existence of the split itself, but rather the careless steps they might take afterward.
How Does the New Coin Exploit Work?
The primary threat to users comes from a technical vulnerability known as a replay attack. When the network splits, Bitcoin holders will automatically have balances on both chains. When a user signs a transaction to sell the fork-result coins on the minority chain, that transaction can be copied and replayed exactly the same way on the original Bitcoin chain. A malicious buyer of the forked coins could then exploit this signature to drain real BTC directly from the seller’s wallet.
Bitcoin developer Kevin Loaec, via his X account, warned that large Bitcoin holders will likely be the first targets of this exploit. The situation is becoming even more critical for users because automatic anti-replay protection has not yet been implemented in the network. This new security system is only scheduled to activate later at block 965,664, or estimated in early September.
Security Steps for BTC Holders
There is currently only one choice: do not move coins at all until both chains are completely separated and system protections are active. Coins that remain stationary in the wallet do not generate new transaction signatures, making it impossible to be hit by a replay attack from the outside. Recently, as much as 90.2% of stolen assets from the Bybit exchange vanished without a trace and could no longer be tracked, reminding users of how fatal a small mistake in managing private key security can be.
For BTC holders, the temptation to cash in on free forked coins may look like an easy profit opportunity. But risking the main asset in the absence of network protection is a risk that could potentially wipe out the entire contents of a wallet in the blink of an eye.
As reported by CoinDesk.
Read also: What Is Bitcoin Halving?
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
