Something unusual happened with Bitcoin this weekend.

A group supporting BIP-110 created its own version of the Bitcoin blockchain. But it didn't last very long.

The new chain produced only two blocks before it stopped moving forward.

So what is going on here?

And why are some people willing to split away from the main Bitcoin network over it?

First, What Is BIP-110?

BIP-110 is basically a proposed change to Bitcoin's rules.

One of the main things it tries to do is limit the amount of non-financial data that can be included in Bitcoin transactions.

People supporting the proposal believe Bitcoin should stay focused on being money.

Their argument is pretty straightforward: Bitcoin's block space is limited, so why should people use that space for things that have nothing to do with payments?

But not everyone agrees.

Critics believe users should be free to use Bitcoin's blockchain as long as their transactions follow the network's existing rules.

And that's where the disagreement starts.

Things Got More Serious

Instead of just arguing about the proposal, BIP-110 supporters actually created a separate chain.

That's a big step.

Think about it this way.

Everyone running the main Bitcoin network is following one set of rules. The BIP-110 group decided to follow different rules.

That means the two groups can end up with different versions of the blockchain.

For a short time, that's exactly what happened.

But the new BIP-110 chain didn't get much support from miners.

It produced two blocks and then stalled, while the main Bitcoin network continued as normal.

So, at least for now, this isn't a situation where Bitcoin has suddenly split into two equally powerful networks.

The main chain is still clearly ahead.

Why Are People Fighting About This?

This is the part I find more interesting.

Bitcoin doesn't have a CEO who can simply make a decision for everyone.

If someone wants to change the rules, they need enough people across the Bitcoin ecosystem to support the change.

That includes miners, developers, node operators, businesses and users.

And getting everyone to agree isn't easy.

BIP-110 has exposed a pretty big disagreement about what Bitcoin should be used for in the future.

Should Bitcoin remain focused mainly on payments and money?

Or should people be able to use the blockchain for other types of data and applications too?

There isn't a simple answer.

Is Bitcoin Actually Split?

Not in the way some headlines might make it sound.

The BIP-110 chain exists, but it has very little mining support compared with the main Bitcoin network.

The fact that it stopped after only two blocks is also important.

So I wouldn't look at this and think Bitcoin has suddenly broken into two major competing networks.

That's not what happened.

But I also wouldn't ignore it.

The disagreement behind BIP-110 is still there.

And if more miners, developers or users decide to support one side, this story could become much bigger.

For now, Bitcoin's main network continues moving forward.

But the argument over what Bitcoin should become is clearly not finished.

The interesting question isn't whether BIP-110 can create another chain. It's whether it can convince enough people to follow it.