What is a Bitcoin Improvement Proposal (BIP)?

A Bitcoin BTC +0.97% Improvement Proposal (BIP) is a design document for introducing features and improvements to the Bitcoin protocol. They can cover a wide range of topics, including technical improvements, protocol changes, network upgrades and best practices.

Overview of Bitcoin Improvement Proposals

BIPs are essential mechanisms within the Bitcoin ecosystem. They serve as the primary process by which the community evaluates and implements echanges to the Bitcoin protocol. The decentralized nature of Bitcoin means that there is no central authority to dictate changes; therefore, BIPs provide a structured way for participants to propose, discuss and adopt improvements.

The BIP process

The timeline for a BIP from start to finish can vary widely depending on the complexity of the proposal, the level of community interest and the degree of consensus among stakeholders. However, a typical timeline might include the following stages:

  1. Proposal drafting: The initial drafting of a BIP involves outlining the proposed improvement, specifying its technical details and providing motivation for its adoption. This stage can vary in duration depending on the complexity of the proposal and the level of detail required.

  2. Community discussion: Once a BIP draft is ready, it is typically shared with the broader Bitcoin community for discussion and feedback. This stage can involve online forums, mailing lists, developer meetings and other communication channels. Community members may provide comments, suggestions, critiques and alternative proposals.

  3. Revision and refinement: Based on community feedback, the BIP author(s) may revise and refine the proposal to address concerns. The proposers may also incorporate suggestions and improve its clarity and technical soundness. This iterative process of revision and refinement may continue for some time until a consensus begins to emerge.

  4. Formalization: Once the BIP has undergone sufficient discussion and revision, it may be formally submitted for consideration as a formal BIP. This involves finalizing the BIP document according to the BIP format and assigning it a unique number. The BIP is then officially listed on the BIP repository or other relevant platforms.

  5. Review and approval: Formal BIPs are subject to review by the Bitcoin community, including developers, miners, users and other stakeholders. This review process evaluates the technical merits, feasibility and potential implications of the proposed improvement. Depending on the level of consensus and support, the BIP may be approved, rejected or revised further. To reach the next stage, an overwhelming majority — over 95% — of miners must signal their support.

  6. Implementation: If a BIP is approved, the next step is to implement the proposed improvement in Bitcoin software clients or other relevant components. This involves coding, testing and integrating the changes according to the specifications outlined in the BIP.

  7. Deployment: Once the implementation is complete and thoroughly tested, the new version of the Bitcoin software containing the improvement may be deployed. This could involve a network upgrade (often referred to as a "hard fork" or "soft fork") or a consensus among users and miners to adopt the new version.

  8. Adoption and monitoring: After deployment, the adoption and performance of the improvement are monitored to assess its effectiveness, impact on the network, and any potential issues or vulnerabilities. Feedback from real-world usage may inform further refinements or adjustments through subsequent BIPs.

The BIP process begins with an informal discussion. Communication channels often taking place in online forums or social media platforms frequented by Bitcoin developers. Once a proposal gains traction, it is formally documented and submitted to the Bitcoin mailing list for broader scrutiny.

BIP categories

There are three categories of BIPs: Standard, Informational and Process.

  • Standard BIPs are those that propose changes affecting the blockchain's operation, such as transaction validation processes.
  • Informational BIPs aim to provide guidance and insight without necessarily requiring implementation.
  • Process BIPs suggest changes to the processes surrounding Bitcoin's development but not to the protocol itself.

The purpose and importance of BIPs

BIPs are not limited to technical changes but also include procedural and informational updates, which collectively contribute to the robustness and adaptability of Bitcoin. The community-driven nature of BIPs exemplifies the decentralized ethos of Bitcoin, as it requires a supermajority of network validators to agree on a proposal before it can be implemented.

This consensus-driven approach mitigates the risk of unilateral changes that could undermine the network's integrity. BIPs ensure that Bitcoin continues to innovate while staying true to its foundational principles of decentralization and open-source collaboration.

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Notable examples of Bitcoin Improvement Proposals

The BIP process has witnessed several significant proposals that have played pivotal roles in the evolution of the Bitcoin network. Among the most notable is BIP 141, also known as 'Segregated Witness' or 'SegWit,' which was introduced to address scalability issues by altering how data was stored in blocks, thereby increasing the block capacity when needed. This upgrade, which began as a BIP, demonstrates the critical role these proposals play in enhancing Bitcoin's functionality.

Another key BIP in Bitcoin's history is the introduction of BIP 91, which was a clever workaround to ensure the smooth adoption of SegWit by stipulating that miners would reject blocks from non-SegWit-supporting nodes, effectively hastening its activation.

Furthermore, the implementation of the Speedy Trial method, which shortened the time frame for miners to signal their approval or disapproval for changes, has also been an important step in streamlining the BIP process. This was evident in the rapid consensus reached for the Taproot upgrade, which brought improvements in privacy, security and efficiency to Bitcoin and laid the groundwork for more complex applications.

Disclaimer: This article was produced with the assistance of OpenAI’s ChatGPT 3.5/4 and reviewed and edited by our editorial team.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

MK Manoylov has been a reporter for The Block since 2020 — joining just before bitcoin surpassed $20,000 for the first time. Since then, MK has written nearly 1,000 articles for the publication, covering any and all crypto news but with a penchant toward NFT, metaverse, web3 gaming, funding, crime, hack and crypto ecosystem stories. MK holds a graduate degree from New York University's Science, Health and Environmental Reporting Program (SHERP) and has also covered health topics for WebMD and Insider. You can follow MK on X @MManoylov and on LinkedIn.