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Are Bitcoin Improvement Proposals (BIPs) Crucial In Crypto Space?

By August 28, 2023August 29th, 20234 minute read

A Bitcoin Improvement Proposal (BIP), as the name implies, is a standard developed to help modify Bitcoin’s core protocol. However, in a few significant cases, BIPs have even provided the Bitcoin community with important information on a large scale. In this blog, let’s explore what BIPs are, their importance, and some associated pros and cons.

Let’s begin.

What are Bitcoin Improvement Proposals (BIPs)?

A BIP is a formal document that introduces new features or procedures to the network. It is the accepted means for promoting ideas, updates, and improvements to the Bitcoin protocol. BIPs can alter any part of the protocol, including consensus rules, community standards, and development procedures. A BIP seeks to coordinate upgrades and development within the decentralized Bitcoin community.

Two years after the creation of Bitcoin, in 2011, British-Iranian programmer Amir Taaki created the first BIP (BIP 0001) to define what a BIP is. However, only developers and programmers had the right to alter the protocol.

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As an open network, Bitcoin enables participation and BIP submission from anybody with desire and abilities. Let’s take a look at the major types of Bitcoin Improvement Proposals (BIPs).

Major types of BIPs

There are three main categories of Bitcoin Improvement Proposals: Standards Track BIPs, Informational BIPs, and Process BIPs.


These are proposals that would make changes to the BTC network protocol, block data, or even how the ecosystem authenticates its transactions. Additionally, Standards Track BIPs seek to alter the compatibility between two versions of BIPs and need community support to be implemented. BIP 91 is the ideal example of this proposal.


Informational BIPs, as their name implies, are intended to draw attention to various design flaws, general guidelines, and other relevant information that should not be taken seriously by the community. BIP 32 is the ideal example of this proposal.


These improvement proposals aim to alter the fundamental procedures supporting the Bitcoin ecosystem. Since Process BIPs involve significant modifications that must be approved by a consensus vote, they can be compared to Standards Track BIPs in some ways. BIP 2 is a good example that suits the category perfectly.

Importance of Bitcoin Improvement Proposals (BIPs) in the Bitcoin community

BIP proposals might include small modifications as well as substantial ones. For instance, they might suggest expanding the block size or adding a new opcode to the Bitcoin Script language. Any suggestion must go through the BIP process to be implemented.

The creation of a proposal is the first step in the BIP process. A BIP number is assigned to a proposal after it has been created. Following that, each suggestion is examined by the community, and if there are no complaints, it is accepted.

A BIP joins the Bitcoin protocol after it is approved. Therefore, the BIP must be implemented by all clients in order to maintain network compatibility.

The Bitcoin community relies on BIP proposals because they enable protocol modifications in a decentralized manner.

Anybody can make a BIP proposal, and everyone can evaluate and comment on proposals. This makes it possible to hear various voices, which helps the most innovative ideas emerge.

How is a BIP created?

Creating a BIP involves the following steps:

  • Idea Generation: Community members suggest ideas to enhance Bitcoin’s functionality, scalability, or security.
  • Drafting the BIP: The proposer drafts a document outlining the proposed Bitcoin changes, including the issue, solution, and specifications.
  • Feedback and Discussion: The draft is shared with the Bitcoin community for input and discussion, allowing for suggestions and addressing concerns.
  • Revision and Refinement: The proposer revises the BIP using feedback, ensuring alignment with Bitcoin’s principles.
  • Seeking Co-Authors: Occasionally, collaborators join to enhance credibility and community support.
  • Consensus Seeking: Achieving community consensus through discussions on platforms like mailing lists or forums.
  • Submitting: Final BIP versions are submitted to repositories like GitHub or
  • Review Process: Experts evaluate technical feasibility, security, standards alignment, etc.
  • Adoption or Rejection: Depending on reviews, a BIP gains approval if supported, or it’s sent back for iterations.
  • Implementation: Approved BIPs are implemented by Bitcoin core developers through coding, testing, and deployment.
  • Deployment and Activation: Implemented changes are deployed using consensus mechanisms like miner signaling.
  • Monitoring and Evaluation: Continuous assessment ensures intended functioning without unforeseen issues.

Pros and cons related to BIPs

Pros of BIPs

  • BIPs can make Bitcoin better by increasing its scalability and efficiency.
  • Second, BIPs can contribute to making Bitcoin more user-friendly.
  • Finally, BIPs can boost trust in Bitcoin by making it more dependable and secure.

Cons of BIPs

  • Before the BIP is implemented, bugs in the code might be simple to find. Therefore, if a BIP is incorrectly evaluated, investors could suffer financial losses in the worst situation.
  • The requirement for BIP compatibility could result in a fragmented Bitcoin network.
  • BIPs might require more thorough testing, which could result in instability and security flaws.
  • BIPs might require greater communication, which might cause user confusion and discord.


Bitcoin Improvement Proposals (BIPs) play a crucial role in shaping the evolution of Bitcoin’s core protocol. The significance of BIPs lies in their capacity to accommodate both minor enhancements and substantial modifications. BIPs provide a structured avenue for addressing Bitcoin’s evolving needs, from introducing new opcodes to suggesting block size adjustments. Ultimately, BIPs exemplify the power of community-driven development in shaping the future of cryptocurrency.

Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
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Harshita Shrivastava

Harshita Shrivastava is an Associate Content Writer with WazirX. She did her graduation in E-Commerce and loved the concept of Digital Marketing. With a brief knowledge of SEO and Content Writing, she knows how to win her content game!

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