CRYPTO NEWS AGREGATOR
Wed, May 27, 2020 11:00 AM by Sumit Bera

An Insight Into Bitcoin Improvement Proposal (BIP)

BIP Bitcoin improvement
While Bitcoin is the most famous and valuable cryptocurrency, its blockchain faces some challenges. In order to ensure the constant dominance of the currency in the market, the Bitcoin Improvement Proposal (BIP) was introduced. 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.

What is BIP?

Bitcoin is considered the first cryptocurrency and still remains the most successful crypto-project, but it also has its drawbacks. And in order to surpass it, as well as to 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. Eventually, one of these new currencies could potentially knock Bitcoin out of the first place.

That’s why the work on the Bitcoin Improvement Proposal began. BIP is a document where developers can submit a recommendation to fix a network problem. For example, after the introduction and implementation of BIP 141, also known as Segregated Witness (SegWit), the transaction rate on the Bitcoin network has increased, and commission fees have significantly decreased.

There are three varieties of BIP:

  • Standards Track — these are the changes in the network protocol, checking blocks or transactions, as well as anything that can affect compatibility;
  • Informational — design issues, general suggestions;
  • Process — ideas that relate to processing outside the network.

Bitcoin Lightning Network

The Lightning Network is a BIP proposal introduced in 2015 by Joseph Poon and Thaddeus Dryja. It aims to make Bitcoin scalable with the help of instant payments that are performed outside the network. These external channels form real Bitcoin transactions with the use of standard scripts that allow transferring funds without risk.

The Lightning network came into force thanks to the introduction of wallets with many signatures, where 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, registration 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 technology

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.

Three BIPs 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 shows how 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, he outlines the operation code, which allowed validation of the data 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 offers of Friedenbach and Lau is that the first supports all the scenarios that are currently used on the Bitcoin network, and the second supports 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. Besides, MAST allowed the Bitcoin network to process a much larger volume of transactions and, thereby, increased its scalability.

How many BIPs are there?

Since absolutely any developer can submit the idea of improving the network to the community, more than 300 of these ideas have already been accumulated, and not all of them have been and will be implemented in Bitcoin.

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