Glossary

Bitcoin Improvement Proposal (BIP)

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A Bitcoin Improvement Proposal (BIP) is a formal proposal to change Bitcoin. Upgrades and security improvements enter the Bitcoin codebase via BIPs. Upgrades such as SegWit, HD Wallets, PSBT and more were all introduced via BIPs, which then underwent a review process and community discussion before being accepted. However, not all BIPs propose code changes. Some, such as BIP 39’s standard of mnemonic phrase backups, establish standards to be used by other Bitcoin related projects.

Smaller changes to Bitcoin, such as bug fixes, code refactoring, or minor efficiency improvements are not included in BIPs. Rather, these changes are submitted directly to Bitcoin’s codebase as proposed code changes.

Related Terms
SegWit
Segregated Witness (SegWit) is a soft-fork upgrade to Bitcoin which was activated in 2017. SegWit fixed the problem of transaction malleability, and paved the way for the implementation of the Lightning Network and many other upgrades.
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Hierarchical Deterministic (HD) Wallet
A Hierarchical Deterministic Wallet is the term used to describe a wallet which uses a seed to derive many public and private keys. These keys are generated in a deterministic way, and are used to send and receive bitcoin.
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Partially Signed Bitcoin Transactions (PSBT)
Partially Signed Bitcoin Transaction is a bitcoin standard which facilitates the portability of unsigned transactions. This allows multiple parties to easily sign the same transaction.
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Mnemonic
A mnemonic phrase is a list of 12-24 words used to back up a wallet. These words can be decoded to yield the seed of a wallet, which generates public and private keys for the wallet.
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Consensus
Consensus is the ideal and the method of coordination between individuals in a decentralized system. Consensus is achieved at the development level with regards to changes to the Bitcoin protocol, and it is also achieved with regards to agreement on the state of the blockchain.
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Open Source
Open-source describes a project whose source code is publicly available and licensed such that individuals can use and alter the source code freely.
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Bitcoin Core
Bitcoin Core is the reference implementation for the Bitcoin source code, meaning all other implementations look to Core for guidance. Bitcoin Core was started by Satoshi Nakamoto when they released the first version of Bitcoin's source code.
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