For a blockchain network, Bitcoin requires general developments, error fixing, alterations of algorithms, and simplifications of its regulations for the best efficient process. A Bitcoin improvement proposal (BIP) is a general procedure to encourage new ideas, changes, and developments to the Bitcoin protocol. BIPs can develop consensus regulation, community standards, and enhancement procedures in the protocol. They are generally emphasized to give development cooperation in the Bitcoin network with no leader. Amir Taaki 2011 created the first BIP 0001. Bitcoin Insider As an open resource, Bitcoins enable anyone in the network to contribute by submitting BIPs. So, Let’s briefly glance at the Bitcoin Improvement proposal process.

What is a Bitcoin Improvement Proposal?

Bitcoin Improvement Proposal is a proposal to make alterations to the Bitcoin blockchain

BIP (Bitcoin Improvement Proposal) is also known as a typical proposal to make alterations to the Bitcoin blockchain. As a software, Bitcoin has always required fixing bugs, upgrading algorithms, simplifying code, and adding more innovative features. For general software owned by centralized projects, software engineers or developers may create tasks and procedures for the changes to be made. However, Bitcoin is an open consensus-based system with no authorized person in charge. The process BIPs will assist the Bitcoin community without the need for a central leader.

Since Bitcoin is a relatively new form of system, its reputation is still being built, and network security is crucial to the users. Furthermore, BIPs, or Bitcoin Improvement Proposals, are an essential component in the growth and development of the Bitcoin protocol. BIPs act as a forum for putting forward and evaluating changes to the protocol, network, client software, or other associated ecosystem parts of Bitcoin.

How are Bitcoin Improvement Proposals created?

How are Bitcoin Improvement Proposals created?

BIPs are the result of unofficial recommendations and ideas that are frequently created through gatherings, forum debates, or social media involvement, particularly on CryptoTwitter. Preempting ideas in forums and chats before turning them into BIPs would save time for both the person who comes up with the idea and the community if a proposal has already been filed or the concept does not adhere to the general development standard. 

Every BIP should be submitted with the knowledge that it will be approved since the process BIPs requires a lot of time and resources. Thus, BIP writers must be careful a lot with the process of submitting the proposal. By consulting the community beforehand, the risk that a plan being rejected is significantly reduced.

A BIP champion is someone who publishes a proposal in BIP style and format, promotes the idea, and engages in discussion in the appropriate channels to obtain the necessary agreement. A BIP champion can be anyone from the community. A BIP must deal with important enhancements or improvements to the Bitcoin protocol. Small adjustments, issues, or patches don't need to be turned into BIPs; they can just follow the usual process BIPs needed for each project development.

3 Types of Bitcoin Improvement Proposal

3 Types of Bitcoin Improvement Proposal

Some BIPs offer variations to Bitcoin’s consensus regulations are called forks. Other BIPs propose community standards or suggestions destined to enforce the interoperability of various Bitcoin-related software. Moreover, some BIPs suggest process guidelines. Different BIP types are handled and activated in different methods. Some examples of Bitcoin Improvement Proposals are listed below.

1) Standard BIPs

This proposal alters the Bitcoin protocol or its fundamental components. Before Bitcoin implementations, they go through a thorough evaluation process and call for widespread agreement. Since they intend to update the protocol, they identify standards that are utilized by Bitcoin applications such as wallets and exchanges. As a result, they need consensus to be authorized.  

Consensus changes frequently come with standards BIPs. BIP 142 created a standard structure for SegWit addresses in the instance of Bitcoin, although it didn't immediately alter the way the Bitcoin network operates. Consequently, BIP 142 is a standard BIP rather than a consensus BIP even if it was a part of the SegWit upgrade.

2) Informational BIPs

These proposals do not suggest changes to the protocol itself; instead, they offer information or guidance to the Bitcoin Community. They cover subjects including recommended procedures, discoveries from research, and instructional materials.

Examples of information BIPs include BIP 174 (Partially Signed Bitcoin Transactions) and BIP 143 (Transaction Signature Verification for Version 3 Witness Programs). BIP 174 suggests a standard for PSBTs or transactions that include all the necessary data to build a legitimate Bitcoin transaction. For Bitcoin transactions using version 3 witness programs, BIP 143 specifies a new transaction signature verification procedure.

3) Consensus BIPs

Consensus BIPs aim to alter a process and the consensus rules of the Bitcoin protocol, they are like standard BIPs but need universal consensus even though they make changes that are not part of the Bitcoin protocol. On the Bitcoin network, consensus modifications require explicit activation.

The changes to Bitcoin's rule set were proposed in BIP 141, and the SegWit upgrade was a significant consensus update. BIP 141 included two new script types, P2WPKH and P2WSH, as well as a definition of the witness field, a brand-new component of Bitcoin transactions. Since nodes on the network had to agree to these modifications, BIP 141 was a consensus BIP.

How does Bitcoin Improvement Proposal work?

How does the Bitcoin Improvement Proposal work?

The proposal is distributed via email or other communication channels like Slack, where preliminary feedback is given by the community, before becoming an official BIP. The author can advance the idea to the following stage and convert it into a BIP after it receives a considerable amount of support. The proposal should be formatted and written in BIP style, and it should provide a clear technical specification and justification for the feature. The BIP champion is in charge of advancing the concept and developing support for it by responding to comments and inquiries.

BIPs require editor approval before being turned into a draft. At that point, it is posted as a draft to the BIP list, where it is given a BIP number by the editor and published to the Bitcoin Core GitHub repository of BIPs. Before the testing phase, the BIP is properly prepared and ready for review and feedback. Additionally, BIPs have a status that anyone can check to see how they are doing. Normally, if no advancement is made within three years of the proposal, anyone can activate the BIP rejected status.

Who can purpose changes to Bitcoin?

Like the internet or other technologies, Bitcoin is an open and decentralized network that is not owned by anybody. The Bitcoin community is made up of supporters of the technology. Bitcoin is controlled by developers, miners, and particular regular users, not by a distinct central authority. The network is indeed driven and improved by developers and miners, but users get to choose the software they wish to use. Therefore, anyone can recommend a change to Bitcoin as long as they have the expertise and skills to offer anything useful to the system. 

How are BIPs approved?

Each BIP begins with a draft that is provided by one or more authors. (However, a BIP is frequently discussed more casually on the Bitcoin development mailing list, Internet Relay Chat (IRC) channels, and/or other forums even before it is a draft.)

The BIP is currently a draft that the author(s) may modify and enhance based on community feedback. A reference implementation in code will also be needed in the case of Bitcoin protocol updates. The idea will be regarded as final if it receives support from the community.

A change to the code must be approved by a large majority—roughly 95%—unless a valid reason is provided for a lower threshold. This is due to the serious consequences such changes may have impacts on miners. It will take around 2000 miners (or around 2 weeks’ worth of mining with 10-minute blocks) to signify 95% support.