What is a BIP
While it is the most famous and valuable cryptocurrency, its blockchain faces a number of challenges. In order to ensure the constant dominance of currency in the market, the development of proposals for improving bitcoins – BIP – began. While most BIPs have different levels of potential for positive impact on bitcoin blockchain, some of them turned out to be much more successful than others. In this article, we will talk about the three most promising proposals for improving bitcoins.
Bitcoin was the first of its kind and still remains the most successful cryptocurrency project, but it also has its drawbacks. And to surpass it, as well as occupy its niche in the digital world, innovators have created many new currencies, each of which has its own blockchain, designed to provide functions that are not available in Bitcoin.
Ultimately, one of these new currencies could potentially knock Bitcoin out of first place. For this, work began on the Bitcoin Improvement Proposal. BIP is a document in which developers can submit a recommendation to fix a network problem. For example, after the introduction and implementation of BIP 141, better known as Segregated Witness (SegWit), the transaction rate on the Bitcoin network increased, and commission fees decreased significantly.
There are three varieties of BIP:
- Standards control — changes in the network protocol, checking blocks or transactions, as well as anything that can affect compatibility.
- Information – design issues, general suggestions.
- Procedural – change ideas that relate to processes outside the network.
Bitcoin Lightning Network
The Lightning Network is a BIP proposal first introduced in 2015 by Joseph Poon and Thaddeus Dree. It aims to make bitcoin scalable with instant payments that occur outside the network. These external channels are real bitcoin transactions using standard scripts that allow you to transfer funds without risk. The Lightning network became possible thanks to the introduction of wallets with many signatures, in which the parties can conduct an infinite number of transactions without having to store all the details on the blockchain.
The only information recorded on the blockchain is the number of bitcoins contained in the wallet and the percentage of contributions of the parties involved. In addition to enabling instant transactions, the update also provides other benefits for the Bitcoin chain.
For example, accounting for micropayments, as well as cross-chain payments. Moreover, the update also promotes the implementation of the functionality of smart contracts on top of the blockchain.
MAST stands for Merkelized Abstract Syntax Tree, a technology that uses the ideas of the Merkle tree and the abstract syntax tree. This is a cryptographic tool that allows you to add large volumes of the hash to the data associated with transactions in the bitcoin chain, due to their layout. There are three BIPs that aim to introduce MAST into the Bitcoin network.
The first is BIP 114, created by Johnson Lau, the developer of the Bitcoin core. The proposal aims to increase network efficiency by introducing a new scenario, which he calls a merkelized scenario. The scenario reduces the need for large amounts of transaction data while maintaining greater privacy.
BIP 116 and BIP 117 were proposed by Bitcoin Core developer Mark Friedenbach and are intended to support MAST in a joint implementation. In BIP 116, it outlines the operation code, which allowed validation of the data as true, without revealing the entire set.
BIP 117 is called the Tail Call semantics, and in combination with the first, it led to a generalized form of MAST. The difference between the proposals of Friedenbach and Lau is that the first supports all the scenarios that are currently in the Bitcoin network, and the second only native SegWit.
The introduction of MAST has led to increased privacy, increased transaction speed, and the ability to include complex data sets, such as smart contracts. In addition, MAST allowed the bitcoin network to process a much larger volume of transactions and, thereby, increased its scalability.
The concept of confidential transactions for the Bitcoin network was developed by Gregory Maxwell. As the name implies, this BIP involves the introduction of a level of confidentiality of the data contained in the Bitcoin network.
This applies to both transaction amounts and the corresponding addresses. Before SegWit, adding sensitive transactions to the Bitcoin chain would require a hard fork. However, after the upgrade, you can add and implement the code using the software plug. The inclusion of confidential transactions has allowed Bitcoins to compete with other privacy-oriented coins such as Monero (XMR) and Zcash (ZEC).
In the article we told you only about what BIP is and about its three most successful implementations. Since absolutely any developer can submit the idea to improve the network to the community’s court – more than 300 of these ideas have already accumulated, and not all of them have been and will be implemented in bitcoin.