Bitcoin Improvement Proposal (BIP) is a technology that simplifies and structures all the formal processes of establishing and implementing improvements in the Bitcoin cryptocurrency network.

Bitcoin is a system that operates based on certain digital protocols and algorithms. Therefore, it is natural that periodically, to increase the efficiency of the algorithms involved, as other digital technologies develop, it is necessary to eliminate errors and modernize protocols. In this case, the main goal that needs to be achieved is to simplify the code as much as possible while ensuring interfacing with other software and adding new functions if necessary.

Since the first cryptocurrency, Bitcoin, was created on the principles of decentralization, when there is no single governing body, there is an open source code, and each user of the system can offer their own improvements. However, their confirmation is required from the rest of the independent developer community.

Features of BIP application

Each proposal made by a participant in the system must receive a specific serial number. Frameworks are used to update protocols and integrate large-scale changes.

Conditions for applying BIP:

• a proposal to improve the Bitcoin code must be drawn up in compliance with the protocol and official rules of the system;
• storage of all proposals is provided in the format of text files that are placed in repositories; their content can be viewed if desired at any time, and every user can do this;
• Any user can put forward ideas for improvements, regardless of rating, but to begin the implementation process, it is necessary to obtain approval from miners and developers.

However, there is a specific gradation of proposals according to the degree of significance and complexity. If the changes concern large-scale updates, then the above technique must be followed. In some cases, confirmation must be obtained from 95% of users so that the decision may take several years. Between the moment of implementation and activation of an improvement, a lot of time can also pass, up to several years. Such examples already existed in practice when proposals were made in 2014 but became available for use only in 2020.

If this is a minor bug fix, then such updates are made offline, but an information notification about the implementation of BIP is sent to users.

BIP specifics

The proposal for improvements was first put forward by programmer Amir Taaki in 2011. Based on this experience, an algorithm for further changes was developed, and the Bitcoin Improvement Proposal system was formed.

A BIP is rejected if no meaningful progress has been made on a particular proposal for 3 years.