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BIP110 activation has two possible split points: mandatory signaling if the threshold is missed, or reduced-data rule enforcement once the deployment becomes active.
Each block header has a version field. By default a miner doesn't set the version bit, so the block is not considered to be signalling support for BIP110.
A miner signals for BIP110 by setting bit 4 in the version field.
BIP110 counts signaling blocks across one 2,016-block difficulty period. Gray cells have not been mined yet.
Blue blocks are signaling blocks. The counter needs 1,109 signals, which is 55% of the full window.
The 1,109th signaling block crosses the threshold with 417 blocks still unmined. That means this window has enough signals for BIP110 to lock in at the next period boundary.
If Window 476 meets the threshold, BIP110 locks in at 961,632. That means activation is scheduled, but the reduced-data rules do not start until one full difficulty period later, at 963,648.
From the activation height, any blocks which don't comply with BIP110's reduced-data rules will be rejected by BIP110 nodes, but they will be accepted by non-BIP110 "Standard" nodes. More on this later.
Run another 2,016-block window with only a small number of signals. This time, the threshold is not on track to be reached.
The period ends below 55% signaling, so this window does not lock in BIP110.
If the 55% threshold is not met, BIP110 nodes reject non-signaling blocks from height 961,632.
During Difficulty Window 477, any non-signaling block can split the chain: BIP110 nodes reject it while Standard nodes may still accept it if otherwise valid.
After either split point creates incompatible tips, the same forking mechanics decide which chain accumulates more work.
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