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What are Bitcoin improvement proposals (BIPs), and how do they work?

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What are Bitcoin improvement proposals (BIPs), and how do they work?
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rn”,”seo_description”:”What is Bitcoin? How does blockchain work? How to mine cryptocurrency? We are glad to help you answer these questions with our quick guides in Explained section.”},”words_count”:826,”description”:” Bitcoin improvement proposals are an essential part of cryptocurrency governance. Learn here what they are and how they workrn “,”author”:{“id”:1534,”title”:”Emi Lacapra”,”url”:”emi-lacapra”,”twitter”:””,”google_plus”:””,”photo”:””,”gender”:”female”,”description”:”Emilia Lacapra has been learning about cryptocurrency and blockchain since 2017. She first started as a small investor and soon became passionate about the industry, the technological innovation and the improvement that it could bring to the world. She believes Bitcoin is the natural currency of the internet. Emi has been an educational content writer in the crypto space for several years and aims at accurately delivering complex concepts.”,”facebook”:””,”email”:””,”linkedin”:””,”created_at”:”2022-04-13 13:40:07″,”updated_at”:”2022-04-23 16:17:03″,”deleted_at”:null,”avatar”:”https://cointelegraph.com/assets/img/icons/author_female.png”,”hash”:”aHR0cHM6Ly9jb2ludGVsZWdyYXBoLmNvbS9hdXRob3JzL2VtaS1sYWNhcHJh”,”relativeUrl”:”https://cointelegraph.com/authors/emi-lacapra”,”user_id”:1534,”language_id”:1,”name”:”Emi Lacapra”,”desc”:”Emilia Lacapra has been learning about cryptocurrency and blockchain since 2017. She first started as a small investor and soon became passionate about the industry, the technological innovation and the improvement that it could bring to the world. She believes Bitcoin is the natural currency of the internet. Emi has been an educational content writer in the crypto space for several years and aims at accurately delivering complex concepts.”,”seo_title”:””,”seo_description”:””,”enabled”:1,”show_in_authors”:0,”show_in_experts”:0},”category_id”:65,”audio”:”https://s3.cointelegraph.com/audio/87923.9cb6ac24-00cc-4a79-9203-76880c03b3d8.mp3″,”tags”:[{“name”:”Bitcoin”,”uri”:”/tags/bitcoin”,”super”:1,”page_title”:”Bitcoin News”},{“name”:”Proof-of-Work”,”uri”:”/tags/proof-of-work”,”super”:0,”page_title”:”Proof of Work News”}],”tag_title”:”Bitcoin”,”date”:”17 HOURS AGO”,”badge”:{“title”:”Explained”,”label”:”default”},”qty”:75,”stats_pixel”:”“,”stats_pixel_url”:”https://zoa.cointelegraph.com/pixel?postId=87923&regionId=1″,”shares”:58,”infographic”:false,”sponsored”:false,”explained”:true,”press_release”:false,”show_referral”:false,”social_description”:””,”social_translators”:{“clipboard_popup_label”:”Link copied”,”socialWechatFooterError”:”WeChat error”,”socialWechatFooterText”:”WeChat share”,”socialWechatHeaderText”:”WeChat share”},”social_shares”:{“post_id”:87923,”post_url”:”https://cointelegraph.com/explained/what-are-bitcoin-improvement-proposals-bips-and-how-do-they-work”,”post_titles”:{“normal”:”What are Bitcoin improvement proposals (BIPs), and how do they work?”,”twitter”:”What are Bitcoin improvement proposals (BIPs), and how do they work?”},”post_text”:{“normal”:”What are Bitcoin improvement proposals (BIPs), and how do they work?”,”twitter”:”What are Bitcoin improvement proposals (BIPs), and how do they work? https://cointelegraph.com/explained/what-are-bitcoin-improvement-proposals-bips-and-how-do-they-work via @cointelegraph”},”accounts”:{“twitter”:”@cointelegraph”}},”socials”:{“facebook”:{“url”:”https://www.facebook.com/sharer/sharer.php?u=https%3A%2F%2Fcointelegraph.com%2Fexplained%2Fwhat-are-bitcoin-improvement-proposals-bips-and-how-do-they-work”,”count”:null,”short”:”fb”,”fa”:”facebook”},”twitter”:{“url”:”https://twitter.com/intent/tweet?text=What+are+Bitcoin+improvement+proposals+%28BIPs%29%2C+and+how+do+they+work%3F https%3A%2F%2Fcointelegraph.com%2Fexplained%2Fwhat-are-bitcoin-improvement-proposals-bips-and-how-do-they-work via @cointelegraph”,”count”:null,”short”:”tw”,”fa”:”twitter”},”telegram”:{“url”:”https://telegram.me/share/url?url=https%3A%2F%2Fcointelegraph.com%2Fexplained%2Fwhat-are-bitcoin-improvement-proposals-bips-and-how-do-they-work &text=What+are+Bitcoin+improvement+proposals+%28BIPs%29%2C+and+how+do+they+work%3F”,”count”:null,”short”:”tg”,”fa”:”paper-plane”},”whatsapp”:{“url”:”https://api.whatsapp.com/send?text=What+are+Bitcoin+improvement+proposals+%28BIPs%29%2C+and+how+do+they+work%3F&href=https%3A%2F%2Fcointelegraph.com%2Fexplained%2Fwhat-are-bitcoin-improvement-proposals-bips-and-how-do-they-work”,”count”:null,”short”:”wu”,”fa”:”whatsapp”},”gplus”:{“url”:”https://plus.google.com/share?url=https%3A%2F%2Fcointelegraph.com%2Fexplained%2Fwhat-are-bitcoin-improvement-proposals-bips-and-how-do-they-work”,”count”:null,”short”:”gplus”,”fa”:”google-plus”},”reddit”:{“url”:”https://www.reddit.com/submit?url=https%3A%2F%2Fcointelegraph.com%2Fexplained%2Fwhat-are-bitcoin-improvement-proposals-bips-and-how-do-they-work&title=What+are+Bitcoin+improvement+proposals+%28BIPs%29%2C+and+how+do+they+work%3F”,”count”:null,”short”:”reddit”,”fa”:”reddit-alien”},”linkedin”:{“url”:”https://www.linkedin.com/shareArticle?mini=true&url=https%3A%2F%2Fcointelegraph.com%2Fexplained%2Fwhat-are-bitcoin-improvement-proposals-bips-and-how-do-they-work&title=What+are+Bitcoin+improvement+proposals+%28BIPs%29%2C+and+how+do+they+work%3F”,”count”:null,”short”:”li”,”fa”:”linkedin”}},”hide_disclaimer”:false,”elink”:”https://cointelegraph.com/”,”etitle”:”Cointelegraph”,”elogo_x2″:”https://images.cointelegraph.com/images/528_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS9zdG9yYWdlL3VwbG9hZHMvdmlldy9hYjAzYTJhMmNlOWEyMWRjMWYwOTYxZDkxNzMxYzhiYS5wbmc=.png”,”elogo_x1″:”https://images.cointelegraph.com/images/260_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS9zdG9yYWdlL3VwbG9hZHMvdmlldy9hYjAzYTJhMmNlOWEyMWRjMWYwOTYxZDkxNzMxYzhiYS5wbmc=.png”,”elogo_svg”:false,”content”:[{“id”:3490,”post_id”:87923,”title”:”How are Bitcoin improvements implemented?”,”content”:”

Bitcoin structure is made of software, hardware and energy resources, and governance is managed entirely through its code. By running a node, everybody agrees on the code rules.

nn

Being an open-source, decentralized cryptocurrency based on a proof-of-work (PoW) consensus system, Bitcoin has no central authority to decide future core protocol changes. Therefore, its development relies on decisions taken by the community through improvement proposals called Bitcoin improvements proposals (BIPs).

nn

From the initial proposal to the final stage, Bitcoin’s development process is deliberately lengthy and purposeful to preserve the network’s security and ensure that trust in the system is maintained at all times.

nn

However, not every change to Bitcoin (BTC) requires a BIP, which is used mainly to improve the protocol. For instance, in the case of the user interface, there’s no need to go through the long process of a BIP.

nn

BIPs will be implemented in anticipation of significant protocol upgrades or large-scale amendments to the system, such as new transaction types like SegWit or transaction properties like replace-by-fee (RBF).

nnnn”,”created_at”:”2022-06-12 15:16:53″,”updated_at”:”2022-06-12 15:28:13″,”sort”:1,”translations”:{“id”:3483,”explained_post_id”:3490,”title_en”:”How are Bitcoin improvements implemented?”,”content_en”:”

Bitcoin structure is made of software, hardware and energy resources, and governance is managed entirely through its code. By running a node, everybody agrees on the code rules.

nn

Being an open-source, decentralized cryptocurrency based on a proof-of-work (PoW) consensus system, Bitcoin has no central authority to decide future core protocol changes. Therefore, its development relies on decisions taken by the community through improvement proposals called Bitcoin improvements proposals (BIPs).

nn

From the initial proposal to the final stage, Bitcoin’s development process is deliberately lengthy and purposeful to preserve the network’s security and ensure that trust in the system is maintained at all times.

nn

However, not every change to Bitcoin (BTC) requires a BIP, which is used mainly to improve the protocol. For instance, in the case of the user interface, there’s no need to go through the long process of a BIP.

nn

BIPs will be implemented in anticipation of significant protocol upgrades or large-scale amendments to the system, such as new transaction types like SegWit or transaction properties like replace-by-fee (RBF).

nnnn”,”title_es”:””,”content_es”:”nn”,”title_cn”:””,”content_cn”:”nn”,”title_de”:””,”content_de”:”nn”,”title_fr”:””,”content_fr”:”nn”,”title_it”:””,”content_it”:”nn”,”title_ar”:””,”content_ar”:”nn”,”title_br”:””,”content_br”:”nn”,”title_jp”:””,”content_jp”:”nn”,”created_at”:”2022-06-12 15:16:53″,”updated_at”:”2022-06-12 15:28:13″,”title_kr”:””,”content_kr”:”nn”,”title_tr”:””,”content_tr”:”nn”}},{“id”:3491,”post_id”:87923,”title”:”What is a Bitcoin improvement proposal?”,”content”:”

Being a blockchain, Bitcoin necessitates regular upgrades, from bug fixes to changes to the algorithms or simplification of its code to provide more efficiency.

nn

A BIP is the standard method employed to promote ideas, changes and improvements to the Bitcoin protocol, a formal document to introduce new features or processes to the network. BIPs can change anything from consensus rules to community standards or development processes within the protocol. A BIP aims to provide upgrade and development coordination within the Bitcoin community, which has no leaders.

nn

The first BIP (BIP 0001) was submitted by British-Iranian programmer Amir Taaki in 2011 — two years after Bitcoin was created– to describe what a BIP is. However, changes to the protocol are not a prerogative of developers and programmers only.

nn

As an open network, Bitcoin allows everyone who desires and has the skills to participate and submit a BIP. Let’s take a look at the Bitcoin improvement proposal process.

nnn”,”created_at”:”2022-06-12 15:17:25″,”updated_at”:”2022-06-12 15:28:13″,”sort”:2,”translations”:{“id”:3484,”explained_post_id”:3491,”title_en”:”What is a Bitcoin improvement proposal?”,”content_en”:”

Being a blockchain, Bitcoin necessitates regular upgrades, from bug fixes to changes to the algorithms or simplification of its code to provide more efficiency.

nn

A BIP is the standard method employed to promote ideas, changes and improvements to the Bitcoin protocol, a formal document to introduce new features or processes to the network. BIPs can change anything from consensus rules to community standards or development processes within the protocol. A BIP aims to provide upgrade and development coordination within the Bitcoin community, which has no leaders.

nn

The first BIP (BIP 0001) was submitted by British-Iranian programmer Amir Taaki in 2011 — two years after Bitcoin was created– to describe what a BIP is. However, changes to the protocol are not a prerogative of developers and programmers only.

nn

As an open network, Bitcoin allows everyone who desires and has the skills to participate and submit a BIP. Let’s take a look at the Bitcoin improvement proposal process.

nnn”,”title_es”:””,”content_es”:”nn”,”title_cn”:””,”content_cn”:”nn”,”title_de”:””,”content_de”:”nn”,”title_fr”:””,”content_fr”:”nn”,”title_it”:””,”content_it”:”nn”,”title_ar”:””,”content_ar”:”nn”,”title_br”:””,”content_br”:”nn”,”title_jp”:””,”content_jp”:”nn”,”created_at”:”2022-06-12 15:17:25″,”updated_at”:”2022-06-12 15:28:13″,”title_kr”:””,”content_kr”:”nn”,”title_tr”:””,”content_tr”:”nn”}},{“id”:3492,”post_id”:87923,”title”:”How are Bitcoin improvement proposals (BIPs) created?”,”content”:”

BIPs result from informal proposals and ideas usually generated in meetups, forum chats or social media engagement, especially on CryptoTwitter.

nn

Pre-emptying an idea in forums and chats before turning it into a BIP will save time for both the ideator and the community if a proposal has already been submitted or the idea is not in line with the general development standards.

nn

Every BIP should be submitted with the aim of being accepted, and since the process is lengthy and requires time and resources, BIP authors must be highly cautious when submitting a proposal. By asking the community first, the chances of a proposal being rejected are strongly reduced.

nn

Anyone from the community can become a BIP champion, which means an author who writes the proposal in BIP style and format and promotes the idea, and discusses it in the relevant forums to get the relevant consensus.

nn

A BIP should concern a significant change or addition to the Bitcoin protocol. Little changes, bugs or patches do not need to be turned into BIPs; they can simply follow the standard workflow required by each project development.

nnnn”,”created_at”:”2022-06-12 15:18:07″,”updated_at”:”2022-06-12 15:28:13″,”sort”:3,”translations”:{“id”:3485,”explained_post_id”:3492,”title_en”:”How are Bitcoin improvement proposals (BIPs) created?”,”content_en”:”

BIPs result from informal proposals and ideas usually generated in meetups, forum chats or social media engagement, especially on CryptoTwitter.

nn

Pre-emptying an idea in forums and chats before turning it into a BIP will save time for both the ideator and the community if a proposal has already been submitted or the idea is not in line with the general development standards.

nn

Every BIP should be submitted with the aim of being accepted, and since the process is lengthy and requires time and resources, BIP authors must be highly cautious when submitting a proposal. By asking the community first, the chances of a proposal being rejected are strongly reduced.

nn

Anyone from the community can become a BIP champion, which means an author who writes the proposal in BIP style and format and promotes the idea, and discusses it in the relevant forums to get the relevant consensus.

nn

A BIP should concern a significant change or addition to the Bitcoin protocol. Little changes, bugs or patches do not need to be turned into BIPs; they can simply follow the standard workflow required by each project development.

nnnn”,”title_es”:””,”content_es”:”nn”,”title_cn”:””,”content_cn”:”nn”,”title_de”:””,”content_de”:”nn”,”title_fr”:””,”content_fr”:”nn”,”title_it”:””,”content_it”:”nn”,”title_ar”:””,”content_ar”:”nn”,”title_br”:””,”content_br”:”nn”,”title_jp”:””,”content_jp”:”nn”,”created_at”:”2022-06-12 15:18:07″,”updated_at”:”2022-06-12 15:28:13″,”title_kr”:””,”content_kr”:”nn”,”title_tr”:””,”content_tr”:”nn”}},{“id”:3493,”post_id”:87923,”title”:”Who can propose changes to Bitcoin?”,”content”:”

As an open and decentralized network, Bitcoin is not owned by anyone, just like the internet or other technologies are not owned by anyone.

nn

The Bitcoin community is formed of supporters of the technology regardless of their background. Developers, miners and especially regular users control Bitcoin, not a specific central authority. Indeed, developers and miners drive and improve the network; however, users choose which software version they want to utilize.

nn

Hence, anyone can propose a change to Bitcoin as long as they have the skills and knowledge to suggest something relevant to add to the Bitcoin protocol.

nnnn”,”created_at”:”2022-06-12 15:18:36″,”updated_at”:”2022-06-12 15:28:13″,”sort”:4,”translations”:{“id”:3486,”explained_post_id”:3493,”title_en”:”Who can propose changes to Bitcoin?”,”content_en”:”

As an open and decentralized network, Bitcoin is not owned by anyone, just like the internet or other technologies are not owned by anyone.

nn

The Bitcoin community is formed of supporters of the technology regardless of their background. Developers, miners and especially regular users control Bitcoin, not a specific central authority. Indeed, developers and miners drive and improve the network; however, users choose which software version they want to utilize.

nn

Hence, anyone can propose a change to Bitcoin as long as they have the skills and knowledge to suggest something relevant to add to the Bitcoin protocol.

nnnn”,”title_es”:””,”content_es”:”nn”,”title_cn”:””,”content_cn”:”nn”,”title_de”:””,”content_de”:”nn”,”title_fr”:””,”content_fr”:”nn”,”title_it”:””,”content_it”:”nn”,”title_ar”:””,”content_ar”:”nn”,”title_br”:””,”content_br”:”nn”,”title_jp”:””,”content_jp”:”nn”,”created_at”:”2022-06-12 15:18:36″,”updated_at”:”2022-06-12 15:28:13″,”title_kr”:””,”content_kr”:”nn”,”title_tr”:””,”content_tr”:”nn”}},{“id”:3494,”post_id”:87923,”title”:”How do Bitcoin improvement proposals (BIPs) work?”,”content”:”

Before becoming a formal BIP, the proposal is communicated via email or other communication channels like Slack, where initial feedback is provided by the community.

nn

Once the proposal receives significant support, the author can progress it to the next stage and turn it into a BIP.  The proposal should be written in BIP style and format and provide a concise technical specification and rationale for the feature. The BIP champion is responsible for promoting the idea and building consensus around it by replying to feedback and questions.

nn

Before becoming a draft, BIPs need to get the go-ahead from the editor. At that point, it is submitted to the BIP list as a draft, and an editor assigns it a BIP number and publishes it to the Bitcoin Core GitHub repository of BIPs.

nn

The BIP is formally generated and ready for review and feedback before advancing to the testing phase. BIPs are also assigned a status that everyone can check to assess progress.

nn

Typically, anyone can activate the BIP rejected status if no progress is made within three years of the proposal.

nnnn”,”created_at”:”2022-06-12 15:19:09″,”updated_at”:”2022-06-12 15:28:13″,”sort”:5,”translations”:{“id”:3487,”explained_post_id”:3494,”title_en”:”How do Bitcoin improvement proposals (BIPs) work?”,”content_en”:”

Before becoming a formal BIP, the proposal is communicated via email or other communication channels like Slack, where initial feedback is provided by the community.

nn

Once the proposal receives significant support, the author can progress it to the next stage and turn it into a BIP.  The proposal should be written in BIP style and format and provide a concise technical specification and rationale for the feature. The BIP champion is responsible for promoting the idea and building consensus around it by replying to feedback and questions.

nn

Before becoming a draft, BIPs need to get the go-ahead from the editor. At that point, it is submitted to the BIP list as a draft, and an editor assigns it a BIP number and publishes it to the Bitcoin Core GitHub repository of BIPs.

nn

The BIP is formally generated and ready for review and feedback before advancing to the testing phase. BIPs are also assigned a status that everyone can check to assess progress.

nn

Typically, anyone can activate the BIP rejected status if no progress is made within three years of the proposal.

nnnn”,”title_es”:””,”content_es”:”nn”,”title_cn”:””,”content_cn”:”nn”,”title_de”:””,”content_de”:”nn”,”title_fr”:””,”content_fr”:”nn”,”title_it”:””,”content_it”:”nn”,”title_ar”:””,”content_ar”:”nn”,”title_br”:””,”content_br”:”nn”,”title_jp”:””,”content_jp”:”nn”,”created_at”:”2022-06-12 15:19:09″,”updated_at”:”2022-06-12 15:28:13″,”title_kr”:””,”content_kr”:”nn”,”title_tr”:””,”content_tr”:”nn”}},{“id”:3495,”post_id”:87923,”title”:”How are BIPs approved?”,”content”:”

Gathering significant consensus within the community is the first step of the process. Sometimes, even the most valuable proposals can take years before they are approved or rejected because the community can’t find an agreement.

nn

Once a BIP is submitted as a draft to the BIP GitHub, the proposal gets reviewed and worked on transparently so that everyone can view its progress and consequent testing outcomes. As Bitcoin blockchain is based on code, protocol changes will have to be reflected in the code, and miners will have to add a reference to their hashed block to signal that they accept or reject their implementation.

nn

Because of the severe implications some changes might inflict on miners, a modification in the code requires acceptance by a vast majority of around 95% unless a reasonable motive is given for a lower threshold. Ninety-five percent support will have to be signaled from the last 2,016 miners (approximately 14 days worth of mining with 10-minute blocks).

nn

As an example, we’ll use the recent implementation of the Taproot soft-fork, labeled as BIP 341. In April 2021, via the means of a “speedy trial code” – meant to give a quick resolution to the upgrade – the Taproot activation was merged into Bitcoin Core.

nn

In the following couple of weeks, at least 90% of the blocks mined (1,815 out of 2,016 blocks mined) included an encoded reference indicating that the miners who mined those blocks favored the upgrade. This paved the way for the astonishing consensus achieved in the following months, leading to the final approval in November 2021.

nn

The final and official approval of a BIP happens automatically when users (node operators) choose which Bitcoin Core version to download and run a node that reflects that change. Then, all upgraded nodes can recognize and accept transactions made using that upgraded protocol.

nn

In summary, these are the main steps of the approval process:

nn

    nt

  • nt

    Anyone can submit a BIP to change Bitcoin core;

    nt

  • nt

  • nt

    An editor must pass the BIP;

    nt

  • nt

  • nt

    The BIP must be approved by ∼95% of miners; and

    nt

  • nt

  • nt

    The community must upgrade to the new software version.

    nt

  • n

nn

Here’s a graphic of the BIP approval process:

nn

Image_0

nnnn”,”created_at”:”2022-06-12 15:23:13″,”updated_at”:”2022-06-12 15:28:13″,”sort”:6,”translations”:{“id”:3488,”explained_post_id”:3495,”title_en”:”How are BIPs approved?”,”content_en”:”

Gathering significant consensus within the community is the first step of the process. Sometimes, even the most valuable proposals can take years before they are approved or rejected because the community can’t find an agreement.

nn

Once a BIP is submitted as a draft to the BIP GitHub, the proposal gets reviewed and worked on transparently so that everyone can view its progress and consequent testing outcomes. As Bitcoin blockchain is based on code, protocol changes will have to be reflected in the code, and miners will have to add a reference to their hashed block to signal that they accept or reject their implementation.

nn

Because of the severe implications some changes might inflict on miners, a modification in the code requires acceptance by a vast majority of around 95% unless a reasonable motive is given for a lower threshold. Ninety-five percent support will have to be signaled from the last 2,016 miners (approximately 14 days worth of mining with 10-minute blocks).

nn

As an example, we’ll use the recent implementation of the Taproot soft-fork, labeled as BIP 341. In April 2021, via the means of a “speedy trial code” – meant to give a quick resolution to the upgrade – the Taproot activation was merged into Bitcoin Core.

nn

In the following couple of weeks, at least 90% of the blocks mined (1,815 out of 2,016 blocks mined) included an encoded reference indicating that the miners who mined those blocks favored the upgrade. This paved the way for the astonishing consensus achieved in the following months, leading to the final approval in November 2021.

nn

The final and official approval of a BIP happens automatically when users (node operators) choose which Bitcoin Core version to download and run a node that reflects that change. Then, all upgraded nodes can recognize and accept transactions made using that upgraded protocol.

nn

In summary, these are the main steps of the approval process:

nn

    nt

  • nt

    Anyone can submit a BIP to change Bitcoin core;

    nt

  • nt

  • nt

    An editor must pass the BIP;

    nt

  • nt

  • nt

    The BIP must be approved by ∼95% of miners; and

    nt

  • nt

  • nt

    The community must upgrade to the new software version.

    nt

  • n

nn

Here’s a graphic of the BIP approval process:

nn

Image_0

nnnn”,”title_es”:””,”content_es”:”nn”,”title_cn”:””,”content_cn”:”nn”,”title_de”:””,”content_de”:”nn”,”title_fr”:””,”content_fr”:”nn”,”title_it”:””,”content_it”:”nn”,”title_ar”:””,”content_ar”:”nn”,”title_br”:””,”content_br”:”nn”,”title_jp”:””,”content_jp”:”nn”,”created_at”:”2022-06-12 15:23:13″,”updated_at”:”2022-06-12 15:28:13″,”title_kr”:””,”content_kr”:”nn”,”title_tr”:””,”content_tr”:”nn”}},{“id”:3496,”post_id”:87923,”title”:”What are the types of Bitcoin improvement proposals (BIPs)?”,”content”:”

There are three main kinds of BIPs: standard, informational and consensus BIPs.

nn

Standard BIPs

nn

They identify standards used by Bitcoin software like wallets or exchanges and aim at changing the protocol; therefore, they require consensus to be approved. For example, they might submit encoding methods for securing Bitcoin or are recommended in the case of interoperability, which means that wallets should be able to recognize and function with any Bitcoin address to be useful.

nn

Informational BIPs

nn

They have an informative purpose only. They offer general guidelines to the community but do not introduce a new feature and are, therefore, not required to gain consensus within the community.

nn

Consensus BIPs

nn

Also called process BIPs, consensus BIPs seek to change a process, and, similar to standard BIPs, require universal consensus despite containing changes outside of the Bitcoin protocol. Consensus changes require explicit activation on the Bitcoin network.

nn

BIPs are an essential component of Bitcoin governance and represent an efficient way to improve and upgrade the top cryptocurrency with no central leader. Ultimately, this is what matters for the technology to be successful.

nnnn”,”created_at”:”2022-06-12 15:24:11″,”updated_at”:”2022-06-12 15:28:13″,”sort”:7,”translations”:{“id”:3489,”explained_post_id”:3496,”title_en”:”What are the types of Bitcoin improvement proposals (BIPs)?”,”content_en”:”

There are three main kinds of BIPs: standard, informational and consensus BIPs.

nn

Standard BIPs

nn

They identify standards used by Bitcoin software like wallets or exchanges and aim at changing the protocol; therefore, they require consensus to be approved. For example, they might submit encoding methods for securing Bitcoin or are recommended in the case of interoperability, which means that wallets should be able to recognize and function with any Bitcoin address to be useful.

nn

Informational BIPs

nn

They have an informative purpose only. They offer general guidelines to the community but do not introduce a new feature and are, therefore, not required to gain consensus within the community.

nn

Consensus BIPs

nn

Also called process BIPs, consensus BIPs seek to change a process, and, similar to standard BIPs, require universal consensus despite containing changes outside of the Bitcoin protocol. Consensus changes require explicit activation on the Bitcoin network.

nn

BIPs are an essential component of Bitcoin governance and represent an efficient way to improve and upgrade the top cryptocurrency with no central leader. Ultimately, this is what matters for the technology to be successful.

nnnn”,”title_es”:””,”content_es”:”nn”,”title_cn”:””,”content_cn”:”nn”,”title_de”:””,”content_de”:”nn”,”title_fr”:””,”content_fr”:”nn”,”title_it”:””,”content_it”:”nn”,”title_ar”:””,”content_ar”:”nn”,”title_br”:””,”content_br”:”nn”,”title_jp”:””,”content_jp”:”nn”,”created_at”:”2022-06-12 15:24:11″,”updated_at”:”2022-06-12 15:28:13″,”title_kr”:””,”content_kr”:”nn”,”title_tr”:””,”content_tr”:”nn”}}],”is_partner_material”:false,”commentsSection”:{“schemaEntityUrl”:”//cointelegraph.com/explained/what-are-bitcoin-improvement-proposals-bips-and-how-do-they-work”,”list”:[],”amount”:0,”i18n”:{“addComment”:”Add a comment…”,”amountOnePostfix”:”Comment”,”amountPostfix”:”Comments”,”cancel”:”Cancel”,”delete”:”Delete”,”edit”:”Edit”,”errorBig”:”Comment text cannot be longer than 2000 characters”,”errorDuplicate”:”Duplicate comment”,”errorSmall”:”Comment text must be at least 2 characters long”,”hideButton”:”Hide comments”,”noComments”:” “,”commentOnModeration”:”Comment on moderation”,”postComment”:”Post”,”reply”:”Reply”,”showAllComments”:”Show All Comments”,”showButtonPostfix”:”comments”,”showButtonPrefix”:”Show”,”signIn”:”Sign in”,”update”:”Update comment”,”commentWasDeleted”:”This comment has been 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real energy use questioned as Ethereum founder criticizes BTC “,”lead”:”A founding member of Ethereum has claimed that Bitcoin uses nearly 1% of the world’s electricity, but different sources put it substantially lower.”,”leadfull”:””,”category_id”:2,”category_url”:”https://cointelegraph.com/category/latest-news”,”category_title”:”Latest News”,”author_url”:”https://cointelegraph.com/authors/tom-mitchelhill”,”author_hash”:”aHR0cHM6Ly9jb2ludGVsZWdyYXBoLmNvbS9hdXRob3JzL3RvbS1taXRjaGVsaGlsbA==”,”author_title”:”Tom Mitchelhill “,”author_img”:”https://images.cointelegraph.com/images/32_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS9zdG9yYWdlL3VwbG9hZHMvdmlldy9mYzg2Mjg3Y2RlYTJhOWIxNjFiZDdlMDhhY2YyMTVmYy5qcGc=.jpg”,”date”:”JUN 10, 2022″,”flash_date”:”JUN 10, 2022″,”sponsored”:false,”press_release”:false,”sponsored_label”:”Sponsored”,”explained”:false,”badge”:{“title”:”News”,”label”:”default”},”published”:{“date”:”2022-06-10 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Bitcoin structure is made of software, hardware and energy resources, and governance is managed entirely through its code. By running a node, everybody agrees on the code rules.

Being an open-source, decentralized cryptocurrency based on a proof-of-work (PoW) consensus system, Bitcoin has no central authority to decide future core protocol changes. Therefore, its development relies on decisions taken by the community through improvement proposals called Bitcoin improvements proposals (BIPs).

From the initial proposal to the final stage, Bitcoin’s development process is deliberately lengthy and purposeful to preserve the network’s security and ensure that trust in the system is maintained at all times.

However, not every change to Bitcoin (BTC) requires a BIP, which is used mainly to improve the protocol. For instance, in the case of the user interface, there’s no need to go through the long process of a BIP.

BIPs will be implemented in anticipation of significant protocol upgrades or large-scale amendments to the system, such as new transaction types like SegWit or transaction properties like replace-by-fee (RBF).

Being a blockchain, Bitcoin necessitates regular upgrades, from bug fixes to changes to the algorithms or simplification of its code to provide more efficiency.

A BIP is the standard method employed to promote ideas, changes and improvements to the Bitcoin protocol, a formal document to introduce new features or processes to the network. BIPs can change anything from consensus rules to community standards or development processes within the protocol. A BIP aims to provide upgrade and development coordination within the Bitcoin community, which has no leaders.

The first BIP (BIP 0001) was submitted by British-Iranian programmer Amir Taaki in 2011 — two years after Bitcoin was created– to describe what a BIP is. However, changes to the protocol are not a prerogative of developers and programmers only.

As an open network, Bitcoin allows everyone who desires and has the skills to participate and submit a BIP. Let’s take a look at the Bitcoin improvement proposal process.

BIPs result from informal proposals and ideas usually generated in meetups, forum chats or social media engagement, especially on CryptoTwitter.

Pre-emptying an idea in forums and chats before turning it into a BIP will save time for both the ideator and the community if a proposal has already been submitted or the idea is not in line with the general development standards.

Every BIP should be submitted with the aim of being accepted, and since the process is lengthy and requires time and resources, BIP authors must be highly cautious when submitting a proposal. By asking the community first, the chances of a proposal being rejected are strongly reduced.

Anyone from the community can become a BIP champion, which means an author who writes the proposal in BIP style and format and promotes the idea, and discusses it in the relevant forums to get the relevant consensus.

A BIP should concern a significant change or addition to the Bitcoin protocol. Little changes, bugs or patches do not need to be turned into BIPs; they can simply follow the standard workflow required by each project development.

As an open and decentralized network, Bitcoin is not owned by anyone, just like the internet or other technologies are not owned by anyone.

The Bitcoin community is formed of supporters of the technology regardless of their background. Developers, miners and especially regular users control Bitcoin, not a specific central authority. Indeed, developers and miners drive and improve the network; however, users choose which software version they want to utilize.

Hence, anyone can propose a change to Bitcoin as long as they have the skills and knowledge to suggest something relevant to add to the Bitcoin protocol.

Before becoming a formal BIP, the proposal is communicated via email or other communication channels like Slack, where initial feedback is provided by the community.

Once the proposal receives significant support, the author can progress it to the next stage and turn it into a BIP.  The proposal should be written in BIP style and format and provide a concise technical specification and rationale for the feature. The BIP champion is responsible for promoting the idea and building consensus around it by replying to feedback and questions.

Before becoming a draft, BIPs need to get the go-ahead from the editor. At that point, it is submitted to the BIP list as a draft, and an editor assigns it a BIP number and publishes it to the Bitcoin Core GitHub repository of BIPs.

The BIP is formally generated and ready for review and feedback before advancing to the testing phase. BIPs are also assigned a status that everyone can check to assess progress.

Typically, anyone can activate the BIP rejected status if no progress is made within three years of the proposal.

Gathering significant consensus within the community is the first step of the process. Sometimes, even the most valuable proposals can take years before they are approved or rejected because the community can’t find an agreement.

Once a BIP is submitted as a draft to the BIP GitHub, the proposal gets reviewed and worked on transparently so that everyone can view its progress and consequent testing outcomes. As Bitcoin blockchain is based on code, protocol changes will have to be reflected in the code, and miners will have to add a reference to their hashed block to signal that they accept or reject their implementation.

Because of the severe implications some changes might inflict on miners, a modification in the code requires acceptance by a vast majority of around 95% unless a reasonable motive is given for a lower threshold. Ninety-five percent support will have to be signaled from the last 2,016 miners (approximately 14 days worth of mining with 10-minute blocks).

As an example, we’ll use the recent implementation of the Taproot soft-fork, labeled as BIP 341. In April 2021, via the means of a “speedy trial code” – meant to give a quick resolution to the upgrade – the Taproot activation was merged into Bitcoin Core.

In the following couple of weeks, at least 90% of the blocks mined (1,815 out of 2,016 blocks mined) included an encoded reference indicating that the miners who mined those blocks favored the upgrade. This paved the way for the astonishing consensus achieved in the following months, leading to the final approval in November 2021.

The final and official approval of a BIP happens automatically when users (node operators) choose which Bitcoin Core version to download and run a node that reflects that change. Then, all upgraded nodes can recognize and accept transactions made using that upgraded protocol.

In summary, these are the main steps of the approval process:

  • Anyone can submit a BIP to change Bitcoin core;

  • An editor must pass the BIP;

  • The BIP must be approved by ∼95% of miners; and

  • The community must upgrade to the new software version.

Here’s a graphic of the BIP approval process:

Image_0

There are three main kinds of BIPs: standard, informational and consensus BIPs.

Standard BIPs

They identify standards used by Bitcoin software like wallets or exchanges and aim at changing the protocol; therefore, they require consensus to be approved. For example, they might submit encoding methods for securing Bitcoin or are recommended in the case of interoperability, which means that wallets should be able to recognize and function with any Bitcoin address to be useful.

Informational BIPs

They have an informative purpose only. They offer general guidelines to the community but do not introduce a new feature and are, therefore, not required to gain consensus within the community.

Consensus BIPs

Also called process BIPs, consensus BIPs seek to change a process, and, similar to standard BIPs, require universal consensus despite containing changes outside of the Bitcoin protocol. Consensus changes require explicit activation on the Bitcoin network.

BIPs are an essential component of Bitcoin governance and represent an efficient way to improve and upgrade the top cryptocurrency with no central leader. Ultimately, this is what matters for the technology to be successful.

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Record Investment Outflows of $423 Million Led to Crypto Bloodbath

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Record Investment Outflows of $423 Million Led to Crypto Bloodbath

Last week saw record outflows of $423 million from crypto assets, according to CoinShares.

The report found that the outflows last weekend were likely responsible for bitcoin’s decline to $17,760. Analyst James Butterfill said: “The outflows were solely focussed on bitcoin, which saw net outflows for the week totaling US$453m.”

BTC outflows bring down institutional investments 

Therefore, if bitcoin is removed from the calculations, Ethereum contributed an inflow of around $11 million while other alts also added minor positive flows, aggregating inflows to the extent of $70 million. 

This was Ethereum’s first inflow after 11 consecutive negative sessions according to CoinShares.

In the past week, the BTC market has slid under the $20,000 level twice. Short-bitcoin saw inflows of $15 million due to the launch of the first U.S.-based short investment product in the week in question, the report noted.

[1/5] This week’s Digital Asset Fund Flows Report is now available! Written by @jbutterfill, the headline for this week is: Record US$423m outflows last week while Short-Bitcoin saw inflows of US$15m. Read on for the highlights -> pic.twitter.com/eIalnFhacv

— CoinShares 👩‍🚀 (@CoinSharesCo) June 27, 2022

Benefits of a crypto bear market

Similar wide margins were last seen in the previous negative peak, in terms of outflows, in Jan at $198 million.

However, in relative terms, Butterfill remarked that the week did not witness the largest negative flows against total assets under management (AuM). 

“This record occurred during the bear market in Feb 2018 where outflows representing 1.6% of AuM were witnessed, while the outflows last week were the third largest on record, representing 1.2% of AuM,” the report noted.

According to FTX CEO Sam Bankman-Fried, the Federal Reserve’s decision to aggressively increase interest rates was the main reason behind the market crash.

But despite the bearish sentiments, some crypto bosses are optimistic about the results of a market downturn. Charlie Silver, founder of Permission.io told Insider: ” There are hundreds of firms that are built on hype and not substance. It will be good for the industry to have them go away.”

“Bear markets are healthy because it resets valuations to reality and flushes out the bad actors. There are many cryptos that are true Ponzi schemes, that pay investors only with new investor money. When the new money dries up the project falls apart,” Silver added.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Uzbekistan warms up to Bitcoin mining, but there’s a catch

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Uzbekistan warms up to Bitcoin mining, but there’s a catch

The executive order spares all the mined assets from taxation and bans mining anonymous currencies.

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Uzbekistan warms up to Bitcoin mining, but there’s a catch

The National Agency of Prospective Projects (NAPP) in Uzbekistan announced its demands toward crypto mining operators. It would only allow the companies that use solar energy to mine Bitcoin (BTC) or other cryptocurrencies. 

The normative act on the government page, dated June 24, describes the confirmation of “Guidelines on the registration of the crypto assets mining,” and sets the finalization date on July 9. The second article of the document offers an uncompromising wording:

“Mining is being carried out only by the legal entity with the use of electric energy, provided by a solar photovoltaic power plant.”

As a further complication, the miners should own the solar photovoltaic power plant that they will use for energy.

The executive order also obliges any mining operator to obtain a certificate and register in the national registry of crypto mining companies. This procedure demands a brief list of documents, and should take no more than 20 days from submitting to the final decision to the licensing body. The certificates would be valid for one year after the registration.

Related: Go green or die? Bitcoin miners aim for carbon neutrality by mining near data centers

All the currency generated from mining activities would be spared taxation, though the mining farms would face the special tariffs on the consumed energy set by the Uzbekistan government. But, the trade operations with mined assets would have to be conducted only on the exchange platforms that are registered in Uzbekistan. The mining of anonymous cryptocurrencies would be prohibited.

In April 2022, the freshly-restructured NAPP became Uzbekistan’s exclusive crypto regulator with the mission to adopt a special crypto regulation regime in the country. This move came in a row of initiatives launched by the Uzbekistan President Shavkat Mirziyoyev to provide the regulatory framework for crypto. In September 2018, Mirziyoyev signed a law prohibiting local firms from launching their crypto exchanges in Uzbekistan. The law only offered legal status to crypto exchanges established by foreign legal entities.

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Celsius denies allegations on Alex Mashinsky trying to flee US

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Celsius denies allegations on Alex Mashinsky trying to flee US

Celsius CEO Alex Mashinsky wasn’t trying to leave the U.S. last week but has continued to work on recovering liquidity and operations, the company has claimed.

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Celsius denies allegations on Alex Mashinsky trying to flee US

Troubled crypto lending firm Celsius is putting their best foot forward to recover operations alongside CEO Alex Mashinsky, who currently stays in the United States, the company has claimed.

A spokesperson for Celsius has denied rumors that the company’s CEO tried to flee the U.S. last week amid the ongoing liquidity crisis of the Celsius Network.

The representative told Cointelegraph on Monday that the firm continues working on restoring liquidity, stating:

“All Celsius employees — including our CEO — are focused and hard at work in an effort to stabilize liquidity and operations. To that end, any reports that the Celsius CEO has attempted to leave the U.S. are false.”

Celsius’ statement came shortly after Mike Alfred, co-founder of the crypto analytics firm Digital Assets Data, took to Twitter on Sunday to claim that Mashinsky attempted to leave the country last week via Morristown Airport in New Jersey.

Citing an anonymous source, Alfred alleged that Celsius’s CEO was trying to go to Israel. “Unclear at this moment whether he was arrested or simply barred from leaving,” he added.

Alfred’s claims followed a massive GameStop-like “short squeeze” of Celsius, with Celsius’ native token Celsius (CEL) jumping 300% in one week by June 21. CEL price also abruptly rallied more than 600% on June 14, with analysts attributing the event to an exchange glitch or liquidation of short traders.

At the time of writing, CEL is trading at $0.741, down around 5% over the past 24 hours, according to CoinGecko. Celsius’ native token is still up more than 160% over the past 14 days.

Celsius Network token (CEL) 30-day price chart. Source: CoinGecko

Some industry observers in the crypto community have expressed skepticism about Alfred’s tweets about Mashinsky, with many considering his allegations as FUD.

If @Mashinsky attempted to leave the country this week, why are you reporting it now exactly when the CEL price is going down? Seems very coincidental Mike Alfud. And why no mainstream media or crypto media is reporting this? #CelShortSqueeze https://t.co/ynJbzWib9o

— Otis — #CelShortSqueeze ©️ ⚡️ (@otisa502) June 27, 2022

As previously reported by Cointelegraph, Celsius officially announced that it would be “pausing all withdrawals, swaps and transfers between accounts” on June 13. United States regulators subsequently started an investigation into Celsius as multiple accounts on the network were frozen.

Related: South Korean prosecutors ban Terraform Labs employees from exiting the country: Report

According to some analysts, Celsius’ liquidity issues should be attributed to shortcomings of the existing crypto lending model in general, as other lenders in the market have faced similar problems recently.

Celsius has been working hard to fix the consequences of the platform’s liquidity crisis, reportedly onboarding advisers and restructuring consultants to help the platform handle potential filing for bankruptcy. On June 18, Celsius’ lead investor BnkToTheFuture and its co-founder Simon Dixon offered to assist the network by deploying a recovery plan.

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