The most impactful Bitcoin Improvement Proposals (BIPs)

By April 23, 2022Bitcoin Business
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Running list of the most impactful Bitcoin Improvement Proposals (BIPs) that are now active.

A full list of BIPs can be found here: https://github.com/bitcoin/bips

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BIP 1 (Aug. 2011): The first BIP was published by Amir Taaki and outlines how to propose a new feature to Bitcoin. There are three kinds of BIP:

  • Standard Track BIP: Changes to the network protocol, block or transaction validation

  • Informational BIP: To express design issues or guidlines

  • Process BIP: Describes a change in process

BIP 10 (Oct 2011): This introduced multi-signature transaction distribution. Read more here: https://en.bitcoin.it/wiki/BIP_0010

BIP 16 (Jan 2012, activated 2013): Pay to script hash (P2SH) was proposed by Gavin Andresen. This significantly improved Bitcoin’s flexibility, enabling more private multisig txs among other benefits. P2SH also provides a method for senders to place the responsibility of paying additional network fees on the recipient rather than themselves.

This was also the first upgrade after Satoshi’s disappearance.

A great story on P2SH by Pete Rizzo here: https://bitcoinmagazine.com/technical/the-battle-for-p2sh-the-untold-story-of-the-first-bitcoin-war

BIP 32 (Feb 2012): This advanced the interoperability, recoverability, and security of wallets via the Hierarchical Deterministic (HD) standard.

Read more about BIP 32 here: https://river.com/learn/terms/b/bip-32/

BIP 39 (Sep 2013): Introduced the standard of Mnemonic phrases - the way we convert a seed into a series of 12-24 words. BIP 39 was never implemented into bitcoin core, but is included on this list due to its widespread adoption.

See the BIP 39 wordlist by blockplate here: https://www.blockplate.com/pages/bip-39-wordlist

BIP 9 (Created: 2015): Established a standard framework for activating soft forks, requiring 95% of blocks to ‘signal’ for an upgrade during a specified time for it to be locked in. In 2017, BIP 8 was proposed by u/shaolinfry, improving upon soft fork procedures.

Read more about BIP 9 from river here: https://river.com/learn/terms/b/bip-9-soft-fork-activation/

BIP 125 (Dec 2015): This introduces Replace-By-Fee (RBF) to Bitcoin, enabling users to replace an unconfirmed transaction with a similar transaction paying a larger fee. In order to speed up a transaction’s confirmation, a user can take advantage of RBF to increase the fee of their transaction.

Recommended video of Andreas explaining what you can do if your bitcoin transaction is stuck (RBF): https://www.youtube.com/watch?v=zL9Nu39qft4

BIP 141 (Proposed 2015, went live Aug 2017): The Segregatted Witness (Segwit) upgrade improved scalability and fixed transaction malleability by storing signature information outside of the block (capped at 1mb).

A brief overview of BIP 141 by u/lopp: https://medium.com/segwit-co/segwit-the-swiftest-safe-path-forward-cf41fe483d58

BIP 340-342 (Proposed: 2018, Implemented: Nov 2021): The Taproot upgrade comprises 3 BIPs that increase the efficiency of complex transactions, improve the security and cost of lightning transactions, and allow for smart contract “hosting of any number of signatories while retaining the data size of a single-sig transaction.”

Read more about Taproot from chainalysis: https://blog.chainalysis.com/reports/bitcoin-taproot-upgrade/

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