Bitcoin Improvement Proposal (BIP)

Understanding Bitcoin Improvement Proposals

A mechanism for introducing new ideas to the Bitcoin network is through a Bitcoin Improvement Proposal (BIP). Due to the absence of a hierarchical or defined organizational structure in Bitcoin, a standardized process was necessary to facilitate the introduction of new concepts.

The format for future BIPs was established in 2011 with the introduction of the first BIP. This format drew inspiration from the proposal system used for making changes to the Python language. All BIPs can be found on GitHub and are publicly available.

Bitcoin Improvement Proposals are categorized into three types: Standards Track, Informational, and Process.

Standards Track BIPs are related to changes in the protocol or validation methods of Bitcoin. Informational BIPs serve the purpose of education or raising awareness. Process BIPs propose changes to the processes of the Bitcoin protocol.

While the Bitcoin community has the option to accept or ignore Informational BIPs, Standards Track and Process BIPs require community consensus and must be given serious consideration. The lifecycle of a BIP involves several stages, starting with the drafting or “triaging” phase, where a draft is proposed, rejected, withdrawn, or deferred. This is followed by the active stage, and eventually, obsolescence or replacement. Most BIPs originate from discussions on listservs or other community platforms.

BIPs can address significant decisions such as hard and soft forks in the blockchain. For example, BIP 141, also known as SegWit, proposed a soft fork to enhance network capacity. Fork proposals require a 95% majority among miners.

It is important to note that BIPs are not enforceable. Even if a consensus is reached within the community regarding a BIP, each developer has the freedom to choose which codebase they utilize. Additionally, individual Bitcoin users are not obligated to use a specific version of the code. Certain changes, such as modifications to the user interface, may not require a BIP at all.