What are BIP and why should every crypto trader follow them?
As the first cryptocurrency to be developed, Bitcoin immediately caught the attention and interest of millions of people as it is one of the most innovative forms of digital money. Bitcoin’s success led to the development of other cryptocurrencies known as altcoins, such as Ethereum, Litecoin, and others. Despite other cryptos, bitcoin remains the most preferred cryptocurrency by millions of crypto enthusiasts for a reason: it keeps increasing the acceptance and improvements of its system to make it more accessible for every user. The need for these changes is known as the Bitcoin Improvement Proposal, or BIP. What is it and why does it matter?
Understand Bitcoin Improvement Proposal
The first decentralized currency, Bitcoin, was developed as open source software. This means that the existing Bitcoin system can be revised and modified, presenting a perfect opportunity for improvement. This allows crypto users to suggest changes or new ideas to improve Bitcoin, but has to go through a rigorous process. The Bitcoin developer community must of course decide on new ideas, and in order to submit changes, a mutually agreed criterion called the BIP or Bitcoin Improvement Proposal is required.
In general, a bitcoin improvement proposal is a document that contains a proposal or design that aims to improve the functional structure of the bitcoin ecosystem – targeting the technical or organizational nature of the cryptocurrency. This proposal must provide a clear and concise explanation and rationale for the new proposed feature, and therefore must be submitted to the community for approval.
As the cryptocurrency industry continues to evolve, it is only natural that cryptosystems also need to improve to keep up with the field. Investors and traders prefer a cryptocurrency with excellent characteristics as it shows potential profit. However, there is one part that many leave out: knowing GDP can help improve trading, but not all platforms provide a means to understand it. A look through Bitcoin Up , a rumored broker connection platform, revealed that the Bitcoin improvement proposal is vital for crypto traders.
Bitcoin Improvement Suggestion: A Brief History
In discussing the bitcoin improvement proposal, the very first proposal in 2011, proposed by an early cryptocurrency developer, Amir Taaki , matters. His proposal established the precedence and format for subsequent BIPS and claimed that he found inspiration for his proposed change in the Python programming language system. Taaki emphasized that Bitcoin improvement proposals could be key to Bitcoin’s overall development if implemented efficiently.
Taaki submitted the first Bitcoin improvement proposal – the BIP001 – to the Bitcoin community in August 2011. The proposal consists of the guidelines for the structure and standards that BIPs should follow. The structure he proposed was later read and improved by another developer, Luke Dashir. Their work will be publicly featured on Bitcoin BIP GitHub, allowing the Bitcoin community and the world to access their suggestions for improvement.
The structure of the Bitcoin improvement proposal
Proposed by Amir Taaki and subsequently modified by other developers, the policy highlights a structure that other suggested improvements should follow. A BIP must follow the structure guide, starting with the preamble where the author must include the BIP metadata in the heading. This should be followed by the summary section, which should provide at least a 200-word summary of the problem.
The copyright section focuses on the description of the proposed improvement’s copyright terms, while the specification sections contain a detailed description of the features of the new modification. Another section is called Motivation, where the proposal writer must explain the inspiration behind the proposal – this is to clear any doubt about his creations and its importance to the Bitcoin community.
The last three sections contain a rationale in which the author must explain why some design decisions were proposed and what the significance of the Bitcoin improvement proposal is. Next is the Backwards Compatibility section, where the author needs to describe incompatibilities that might be an issue with the previous versions and how the proposed change would deal with those incompatibilities. Finally, while the BIP does not require a reference implementation section before it is accepted, it is required before it can reach final status – this section contains appropriate test codes and required documentation for the Bitcoin protocol.
How BIP are approved
A BIP has a life cycle, just like any other type of proposal. Its status is referred to as ‘state’ and the process by which it is approved begins as a draft. The draft phase of the BIP is considered incomplete because it is left prematurely.
When a GDP is delayed because its performance has not improved, it is said to be deferred. However, if it goes through and the bitcoin community engages in debates to determine the prospects, that is known as the proposed phase.
A rejected BIP occurs when the community decides to take action against it; Similarly, an author can also withdraw their proposal, which is referred to as withdrawn. After careful consideration, the timing of adopting GDP is now in its final stages. A BIP is considered superseded when a subsequent BIP supersedes it, while it is said to be obsolete when the proposed changes render the previous BIP obsolete.
Why crypto traders need to follow BIP
BIPs refers to the changes to the Bitcoin network proposed by core developers that, if implemented, will bring about a formal change to Bitcoin. There is no denying that BIPs are a great tool to organize the work and development of Bitcoin, which is why experts recommend this process; Crypto traders must follow bitcoin improvement suggestions for all crypto assets they own.
Advanced crypto traders, or traders who have been in the crypto industry for a long time, likely have an opinion or two or recommendations on how certain cryptos can be improved – GDP is the perfect way to do so. After you come up with top-notch ideas, all you have to do is propose them by following the suggestion structure above. It then goes through a discrete process and may or may not be approved. These ideas from high profile minds will surely improve the world of cryptocurrency and turn it into a system that everyone enjoys efficiently.
The Bitcoin Improvement Proposal or BIPs is a definitive way to bring decentralization to the public as it allows and practices the freedom to suggest and propose improvements to the current decentralized finance that would benefit the community. So, if you have great ideas or suggestions on how to improve a specific area of your invested cryptocurrency, don’t miss the opportunity to submit a bitcoin improvement suggestion.