Innovation in Bitcoin

Bitcoin has undergone many changes and is still evolving into a more and more robust and better system by addressing various weaknesses in the system. Performance has been a topic of hot debate among Bitcoin experts and enthusiasts for many years. As such, various proposals have been made in the last few years to improve Bitcoin performance, resulting in greater transaction speed, increased security, payment standardization, and overall performance improvement at the protocol level.

These improvement proposals are usually made in the form of Bitcoin Improvement Proposals (BIPs) or fundamentally new versions of Bitcoin protocols, resulting in new networks altogether. Some of the changes proposed can be implemented via a soft fork, but a few need a hard fork and, as a result, give birth to a new currency.

In the following sections, we will look at the various BIPs that can be proposed for improvement in Bitcoin. Then, we will discuss some advanced protocols that have been proposed and implemented to address various weaknesses in Bitcoin.

Bitcoin Improvement Proposals

These documents, also referred to as BIPs, are used to propose improvements or inform the Bitcoin community about the improvements suggested, the design issues, or some aspects of the Bitcoin ecosystem. There are three types of BIPs:

• Standard BIP: Used to describe the major changes that have a major impact on the Bitcoin system; for example, block size changes, network protocol changes, or transaction verification changes.
• Process BIP: A major difference between standard and process BIPs is that standard BIPs cover protocol changes, whereas process BIPs usually deal with proposing a change in a process that is outside the core Bitcoin protocol. These are implemented only after a consensus among Bitcoin users.
• Informational BIP: These are usually used to just advise or record some information about the Bitcoin ecosystem, such as design issues.

Now that we've provided this brief discussion on Bitcoin improvement and evolution, let's look at some of the excellent ideas that have emerged from research and innovation efforts related to Bitcoin.