BIPs: Yes, the Bitcoin Network Gets Timely Upgrades, Too. Here’s How It Works

As you’re aware, the DeFiChain blockchain was created as a hard fork of the Bitcoin network, and it relies on the security principles of Bitcoin. The world’s largest and oldest blockchain has been around for over a decade, but the network hasn’t changed much since its inception. It has sometimes been criticized for its slow pace of change.

Slow and steady

It’s not that the Bitcoin network hasn’t received any upgrades since its inception. It’s just that the pace of upgrades could be slow because the community prioritizes security and reliability over everything else. The changes could range from tiny tweaks to major upgrades like Taproot that was implemented in November 2021.

In the absence of a centralized leadership, the onus falls on the Bitcoin community to discuss, approve, and implement any upgrades. Behind every upgrade, there is a successful "BIP" or Bitcoin Improvement Proposal. So, what’s a BIP and how does it work?

There are three main kinds of BIPs:

• Standard: The standard BIPs require consensus as they concern the standards used by the software. They’re aimed at making changes to the protocol.
• Informational: These BIPs don’t require consensus because they offer only general guidelines rather than the introduction of new features.
• Consensus: The consensus BIPs aim to change a process, and thus require explicit activation on the Bitcoin network.

How is the Bitcoin network upgraded?

The Bitcoin blockchain receives regular upgrades ranging from bug fixes, patches, algorithm changes, code simplification, etc. But the small changes don’t need to be turned into a BIP. They can easily be executed via the standard workflow needed for each project development. For instance, you don’t need to go through the BIP process to tweak the user interface.

BIPs are often used to improve the protocol by changing the community standards, consensus rules and development processes. The process is lengthy by design to ensure that the network remains secure throughout.

As an open network, Bitcoin allows anyone to submit their proposals. The initial idea is discussed with the community via social channels, forum chats, or meetups. Talking to the community also helps you discover whether any such proposal has been submitted in the past and whether the idea is in line with the general development standards.

If your idea gathers initial support from the community, you can go ahead and submit a formal proposal written in the standard BIP style and format. You have to provide your rationale behind the proposal along with a concise technical specification.

There are three different stages your BIP has to go through before it can be implemented:

• Draft: Submitted to the mailing list and the Bitcoin Core GitHub repository of BIPs.
• Proposed: Includes a plan on how to implement the change in the Bitcoin network.
• Final: The BIP has been accepted and ready to be implemented.

Now before your BIP can become a draft, it needs to be reviewed by an editor, who edits for the language and format and makes sure that the upgrade is technically feasible. The editor can even reject it. Once it gets the editor’s green signal, it gets an official BIP number and you - the champion of this BIP - will be responsible for presenting, promoting, and discussing it with the community.

It’s worth pointing out that the BIPs could take months or years before they get implemented as the community discusses the ideas, makes changes, and reaches a consensus. The consensus participants can show whether they are in favor of your BIP or against it through a practice called signaling. If around 95% of the blocks mined (1,815 out of the last 2,016 blocks) include an encoded signal indicating that the respective miners favored the upgrade, the BIP will go through.

Finally, it’s time to implement the upgrade, which takes place in two steps - merging the upgrade into the Bitcoin Core and then activating it. The BIP gets official approval when users download the latest version of the Bitcoin Core to run a node that includes the change

Closing thoughts

Anyone can submit a BIP, though an editor must approve it for it to become a draft. The proposal then needs to be approved by a significant majority of miners (∼95%) and the nodes must upgrade to the new software version before the upgrade becomes a reality. In the future, we could see upgrades like the Bitcoin Covenant (BIP 0119) that would change how we use Bitcoin after a transaction is processed. The covenant could restrict where you can send your Bitcoin, ensuring that it goes only to whitelisted addresses. It will not only improve the network security but also allow users to get their funds back if a thief tries to steal them.