Bitcoin holders risk losing real BTC if they sell coins from BIP-110 fork, says developer

Bitcoin holders may face a significant risk this weekend if they attempt to sell coins from a potential fork of the cryptocurrency. The situation arises due to a Bitcoin Improvement Proposal (BIP) called BIP-110, which aims to exclude non-payment data from Bitcoin transactions for a year. This proposal requires miners to agree by marking the blocks they produce, with 1,109 marked blocks out of a 2,016-block stretch needed for approval.

However, a competing branch of Bitcoin could emerge if miners continue to build a branch that does not adhere to BIP-110. If this split occurs, Bitcoin holders would initially have the same balance on both chains, but selling coins from the fork could lead to a "replay attack." In such an attack, the seller's Bitcoin could be taken by the buyer, who receives the same amount of actual BTC at the same destination. This is because transactions signed to send the fork coins can also be broadcast on the original Bitcoin chain.

Bitcoin developer Kevin Loaec warned on X that large holders could be targeted first in this potential security risk. He advised that leaving the coins alone is the safest option, as coins that remain unsold will not be replayed since there is no signed transaction to copy. The non-payment data restrictions enforced by BIP-110 will not take effect until block 965,664, expected around the beginning of September. Until then, holders must carefully manage their coins to avoid falling victim to this potential replay attack.