Bitcoin Fork August 2026: BIP-110, eCash, Covenants and the Quantum Clock

Bitcoin’s consensus rules have not changed since Taproot activated in November 2021. In August 2026 two protocol events are scheduled roughly two weeks apart: BIP-110, a contested soft fork whose mandatory signaling window opens at block 961,632, estimated around 9 August, and eCash, a hard fork targeted at block 964,000 around 21 August.

This overview explains what these events mean and how covenant and post-quantum proposals fit into Bitcoin’s broader roadmap.

Key takeaways

• • Bitcoin’s last consensus change was Taproot, activated in November 2021. Nothing has altered the rules since. It has been the longest quiet stretch in its history.
  • The nearest flashpoint is a proposed soft fork, BIP-110, whose mandatory signaling window opens at block 961,632, estimated around 9 August 2026. It would limit how much arbitrary data a transaction can carry for a one-year trial period.
  • Miner support has stayed marginal. Signaling was below 1% through mid-July 2026 and had only climbed to about 2% by 30 July, against a 55% early lock-in threshold. On those numbers a network-wide change is unlikely
  • A separate hard fork called eCash is set to split off days later at block 964,000, around 21 August. It credits holders a matching balance on the new chain, but the design is not a clean one-for-one snapshot: it also reassigns roughly 500,000 dormant Satoshi-linked coins on the forked chain, which is the single most contested part of the proposal.
  • Existing Bitcoin holders do not need to take any action, as the proposed upgrades and hardfork will not affect ownership or the operation of the Bitcoin network.
  • The deeper debate is about covenants. OP_CTV (BIP 119) and OP_CAT (BIP 347) would make Bitcoin far more programmable. OP_CAT reached “Complete” specification status on 1 March 2026 with no mainnet activation parameters, while OP_CTV now has a published activation client with a 2027 timeline. Neither has broad consensus.
  • The clock nobody controls is quantum. A 31 March 2026 Google Quantum AI whitepaper estimated Bitcoin’s signature scheme could be broken with fewer than 500,000 physical qubits, roughly twenty times fewer than the 2019 estimate, moving a post-quantum migration (BIP-360) from “someday” toward “this decade.”

Figure 1: Bitcoin’s 2026 upgrade indicative timeline

Source: BIP-110 (bips.dev); CoinDesk; Google Quantum AI, March 2026; Spark; AMINA Bank

There are two ways to change Bitcoin:

• A soft fork: it tightens the rules and stays backward compatible, so nodes that do not upgrade still accept new blocks.
• A hard fork: it loosens or expands the rules and is not backward compatible, so it can split the chain in two.

Bitcoin strongly prefers soft forks, and it sets the activation bar deliberately high: rough consensus is needed across developers, miners, node operators, businesses, and users, and no single group can force a change on the others.

Figure 2: Soft fork versus hard fork

Source: AMINA Bank

Taproot cleared that bar in 2021, improving Bitcoin’s scripting and privacy. Nothing has cleared it since. There is no chief executive, no foundation that can ship a consensus change on its own, and no roadmap that binds anyone. The result is a protocol that has not shipped a consensus change in more than four years, by design. That conservatism becomes a strain when the world starts asking Bitcoin to do more.

Over the past two years, traders and collectors have used Bitcoin transactions to embed images, text, and tokens directly on the chain, largely through Ordinals and Inscriptions and the Runes token standard, the activity that BIP-110 is written to restrict. To some that is harmless innovation. To others it is spam that bloats the ledger and drifts away from Bitcoin’s purpose.

The disagreement showed up in node software before it reached consensus rules. When the dominant Bitcoin implementation loosened its default limits on storing arbitrary data in transactions, Bitcoin Knots, a rival implementation that kept filtering that data, gained ground among operators who disagreed. Knots now runs on somewhere between 8% and 23% of reachable nodes depending on the metric, a spread that is itself disputed. BIP-110 is that same argument escalated from a software preference to a proposed network rule.

BIP-110, formally the Reduced Data Temporary Softfork, would restrict how much arbitrary data a transaction can carry for a one-year trial period, after which the rules expire and outputs are unrestricted again. Supporters frame it as defending Bitcoin’s role as sound money and keeping the chain lean.

Critics include Adam Back, the Blockstream chief executive whose Hashcash work is cited in the Bitcoin whitepaper, Jameson Lopp, chief security officer at the self-custody firm Casa, and Michael Saylor, who published a 110-point critique. They frame it as censorship, warn that it would invalidate currently valid fee-paying transactions, and note that a 55% threshold rather than the traditional 95% raises split risk.

On the numbers, activation looks unlikely. Signaling uses version bit 4, and early lock-in requires 1,109 of 2,016 blocks in a single retarget period. Signaling stayed below 1% through mid-July 2026 and had reached only about 2% by 30 July. No major pool has committed: F2Pool has refused outright, AntPool has stayed silent, Foundry USA opened a hashrate-weighted miner vote, and Ocean produces effectively all signaling blocks. On those numbers, the likelier outcome is a small breakaway chain rather than a network-wide change.

A separate eCash hard fork is scheduled to split off just days later, so two contentious protocol events land inside the same narrow window. Large, regulated holders, including spot ETFs, may decide not to take an active part in either, but they still have to plan for any eventual action.

The eCash fork is the cleaner of the two events, and the more revealing. It is the work of Paul Sztorc, founder of LayerTwo Labs, a developer who spent years trying to add his sidechain design to Bitcoin through a soft fork, formally submitted as BIP300 and BIP301 in 2017 and 2019,

Targeted at block 964,000, around 21 August 2026, eCash is a near-copy of Bitcoin Core that keeps the same SHA-256 mining algorithm, forks through a one-time difficulty reset to minimum, and credits bitcoin holders a matching balance on the new chain at the instant of the split. On top of that base it switches on Drivechain, a set of sidechains meant to host decentralised exchanges, prediction markets, privacy features, and quantum-resistant tools without touching the main chain.

The part that has drawn the most criticism is not the credit to ordinary holders. The proposal’s funding mechanism reassigns roughly 500,000 dormant Satoshi-linked coins on the new chain. Critics, including Fidelity Digital Assets, counter that rewriting forked-chain balances at addresses a user does not control sets a poor precedent. That distinction matters for anyone modelling the credit as a straightforward one-for-one snapshot, because it is not.

The name is a deliberate piece of history. Satoshi Nakamoto circulated the earliest draft of the Bitcoin whitepaper under the filename ecash.pdf, and the economist Milton Friedman used the same word in a 1999 interview to describe the digital cash he thought the internet would eventually need. Sztorc is claiming that lineage on purpose.

2017 vs 2026: how this split is different

Figure 3: The 2017 split versus the 2026 forks

Sources: CoinDesk; news.bitcoin.com; AMINA Bank

The 2017 summer Bitcoin split was over block size, spinning off Bitcoin Cash and giving every holder a 1:1 balance on the new chain. The same crisis produced a user-activated soft fork, BIP 148, which threatened to reject any block that did not enforce the new rules.

The difference this time is that neither 2026 event has assembled comparable rival factions, which is why most observers expect small breakaway chains rather than another civil war.

No exchange or custodian is obliged to support a forked chain, and support is decided by provider rather than announced network wide.

Whether a balance is claimable, and on what timeline, therefore depends on the custodian or exchange holding the coins. The only reliable answer comes from that provider in writing.

Behind the data fight sits a much older ambition: making Bitcoin more programmable without breaking what makes Bitcoin. Covenants are the central idea. A covenant is a rule attached to a coin that constrains how it can be spent in the future, for example an output that can only move to a pre-agreed set of addresses. That single capability unlocks vaults, which are custody arrangements with built-in guardrails, along with safer Lightning channels and trust-minimised bridges.

Figure 4: OP_CTV versus OP_CAT compared

Sources: Galaxy Research; bips.dev (BIP 347); Spark; Bitget Research; AMINA Bank

For institutions, vaults are the part that matters. Withdrawal limits, time delays, and pre-approved destination addresses are controls that already exist inside every custodian, but they live in the operator’s own systems and depend on the operator enforcing them correctly. Covenants would let those same rules be written into Bitcoin script, where the network enforces them. That moves part of the control framework from operational policy to something enforceable on-chain, which is a different assurance model even where the day-to-day workflow looks unchanged.

Whether that happens, and when, is unresolved. OP_CAT reached “Complete” specification status on 1 March 2026 and has been tested heavily on signet, but a finished specification is not the same as agreement to activate, and it has no proposed mainnet activation parameters. OP_CTV is the proposal that moved: an activation client now specifies a Speedy Trial structure with a 90% miner threshold and a minimum activation height around May 2027. Competing designs such as LNHANCE remain in play, and multiple credible proposals fighting for the same slot can push activation further out. Nothing here is a 2026 planning item. It is worth tracking because it changes what custody can look like, not because a decision is imminent.

The slowest-moving but most consequential upgrade is the one aimed at quantum computers. Bitcoin proves ownership with elliptic-curve signatures. A sufficiently powerful quantum computer could derive a private key from an exposed public key and spend coins that are not its own. For years, this was treated as a distant concern.

On 31 March 2026 a Google Quantum AI whitepaper estimated that Shor’s algorithm could solve the 256-bit elliptic curve discrete logarithm problem with fewer than 1,200 logical qubits and, on superconducting hardware with planar connectivity, fewer than 500,000 physical qubits, running in minutes. That is roughly twenty times fewer qubits than the 2019 estimate. Google validated the result using a zero-knowledge proof rather than publishing the attack vector and separately set itself a 2029 deadline to migrate its own infrastructure to post-quantum cryptography. The paper does not claim such a machine exists today.

The exposure is not evenly spread. Coins are vulnerable mainly when their public key is already visible on-chain, which applies to older pay-to-public-key outputs and any address that has been reused after spending. The same research put the amount of bitcoin sitting in exposed or reused-key addresses at roughly 6.9 million BTC, about 32% of the circulating supply, including many of the earliest mined outputs.

The response is a proposed post-quantum soft fork, most concretely BIP-360, which introduces quantum-resistant spending paths. Writing the code is not the hard part. Migration is. Moving that many coins into quantum-safe scripts would be the largest coordinated key rotation Bitcoin has ever attempted, and coins whose owners are lost or inactive may never move at all.

None of the proposals on the table in 2026 are likely to change Bitcoin this year. BIP-110 is signaling around 2% support, OP_CAT is specified but has no activation path, OP_CTV’s own client points at 2027, and quantum migration is a multi-year programme that has not properly started.

What is the next Bitcoin upgrade?

There is no single upgrade scheduled the way Ethereum schedules them. The nearest concrete event is the proposed BIP-110 soft fork in August 2026. The larger debates are covenants (OP_CTV and OP_CAT) and a future post-quantum migration (BIP-360).

When is the BIP-110 soft fork?

BIP-110’s mandatory signaling window opens at block 961,632, estimated around 9 August 2026, and runs to block 963,647. Because miner support has stayed in the low single digits, activation is not guaranteed and a chain split may be possible.

Which exchanges and custodians will support eCash?

Support for a forked chain is decided provider by provider and is not announced network-wide. Many regulated mandates restrict or prohibit holding a forked asset, so some providers may never claim a credited balance. The only reliable answer comes from the custodian or exchange that holds the coins.

How does a Bitcoin fork affect ETFs and institutional holders?

For a low-signaling fork like BIP-110, the practical effect on a regulated product is close to zero. The ETF stays on the dominant chain and continues to track it. The work sits with the custodian, not the investor. Custodians have to plan for a chain split: implementing replay protection so a transaction on one chain cannot be rebroadcast on the other, deciding whether to claim any airdropped asset at all (most regulated mandates do not permit holding it), and handling the tax treatment if they do, since airdropped coins can be treated as income at receipt.are likely to be treated as income at receipt.

What are Ordinals and Runes, and why do they matter to this fork?

Ordinals and Inscriptions embed data such as images and text into Bitcoin transactions, and Runes is a token standard built on the same idea. The growth of this on-chain data is the core reason BIP-110 exists, because supporters want to limit it.

What are Bitcoin covenants?

Covenants are rules that restrict how a coin can be spent in the future. They can enable vaults, safer Lightning payments, and trust-minimised bridges. OP_CTV and OP_CAT are the leading proposals to add them.

What is the difference between OP_CTV and OP_CAT?

OP_CTV (BIP 119) is narrow and commits a coin to a predefined spending template. OP_CAT (BIP 347) is broader, reviving a disabled opcode that lets scripts join data together and opening a wider design space, with a correspondingly larger security surface to review. OP_CTV currently has a published activation client; OP_CAT does not.

Will quantum computers break Bitcoin?

Not yet. But a 31 March 2026 research estimate sharply lowered the hardware thought necessary, to fewer than 500,000 physical qubits, which is why a post-quantum upgrade (BIP-360) is now taken seriously. The main challenge is migrating existing coins with exposed public keys to quantum-safe addresses.

When was the last Bitcoin upgrade?

Taproot, in November 2021. Nothing has changed since. That gap of more than four years is the point: Bitcoin’s rules move slowly by design, which is why the 2026 proposals are drawing attention.

Disclaimer: Research and Educational Content

This document has been prepared by AMINA Bank AG (“AMINA”). AMINA is a Swiss licensed bank and securities dealer with its head office and legal domicile in Switzerland. It is authorised and regulated by the Swiss Financial Market Supervisory Authority (“FINMA”).

This document is published solely for educational purposes; it is not an advertisement nor a solicitation or an offer to buy or sell any financial investment or to participate in any particular investment strategy. This document is for publication only on AMINA website, blog, and AMINA social media accounts as permitted by applicable law. It is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or would subject AMINA to any registration or licensing requirement within such jurisdiction.

Research will initiate, update and cease coverage solely at the discretion of AMINA. This document is based on various sources, incl. AMINA ones. In preparing this document, AMINA may have made limited use of artificial intelligence-enabled tools to assist with research, summarisation, and drafting, with all content subject to human review and validation.

No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained in this document, except with respect to information concerning AMINA. The information is not intended to be a complete statement or summary of the subjects alluded to in the document, whereas general information, financial investments, markets or developments. AMINA does not undertake to update or keep current information. Any statements contained in this document attributed to a third party represent AMINA’s interpretation of the data, information and/or opinions provided by that third party either publicly or through a subscription service, and such use and interpretation have not been reviewed by the third party.

Any formulas, equations, or prices stated in this document are for informational or explanatory purposes only and do not represent valuations for individual investments. There is no representation that any transaction can or could have been affected at those formulas, equations, or prices, and any formula(s), equation(s), or price(s) do not necessarily reflect AMINA’s internal books and records or theoretical model-based valuations and may be based on certain assumptions. Different assumptions by AMINA or any other source may yield substantially different results.

Nothing in this document constitutes a representation that any investment strategy or investment is suitable or appropriate to an investor’s individual circumstances or otherwise constitutes a personal recommendation. Investments involve risks, and investors should exercise prudence and their own judgment in making their investment decisions. Financial investments described in the document may not be eligible for sale in all jurisdictions or to certain categories of investors. Certain services and products are subject to legal restrictions and cannot be offered on an unrestricted basis to certain investors. Recipients are therefore asked to consult the restrictions relating to investments, products or services for further information. Furthermore, recipients may consult their legal/tax advisors should they require any clarifications.

At any time, investment decisions (including, among others, deposit, buy, sell or hold investments) made by AMINA and its employees may differ from or be contrary to the opinions expressed in AMINA research publications.

This document may not be reproduced, or copies circulated without prior authority of AMINA. Unless otherwise agreed in writing, AMINA expressly prohibits the distribution and transfer of this document to third parties for any reason. AMINA accepts no liability whatsoever for any claims or lawsuits from any third parties arising from the use or distribution of this document.

©2026 AMINA, Kolinplatz 15, 6300 Zug