The fork that died in 8 hours: What Bitcoin’s failed split reveals about consensus

A bid to alter Bitcoin's protocol split occurred on August 6, 2023, collapsing within eight hours. This event occurred when only 2.53% of batches supported the proposed change to pause the storage of non-financial data in transactions for one year. The attempt failed because miners, who process transactions and receive newly issued tokens and fees, saw no reason to abandon the main chain.

The split created a significant gap between two competing versions of the blockchain, with the minority chain producing just two batches while the main network reached a milestone of 961,681 blocks. Miners, operating under profitability-focused priorities, maintained the main chain, and the breakaway group's mining difficulty adjustment remained unfeasible even after 350 days.

This protocol dispute removed one source of uncertainty for market participants, enabling them to focus on other factors affecting Bitcoin's price. The price held steady around US$64,800, within a 30-day range of US$61,800 to US$66,900, and was 3.1% below its highest point. The asset was above short-term moving averages but below a long-term one, creating a mixed picture.

Institutional flows, such as US$865.3M in inflows to ETFs and significant outflows, provided positive news amid this quiet market environment. However, retail participation remained hesitant, with a soft domestic demand signaled by the Coinbase premium. Derivatives trading demonstrated limited speculation, with the spot cumulative volume delta (US$301.6M) significantly lower than the futures cumulative volume delta (US$2.79B).