The most important BIPs every Bitcoiner should know
There are more than 200 Bitcoin Improvement Proposals, but a few dozen explain most of how Bitcoin works today: the soft forks that shaped its rules (P2SH, SegWit, Taproot), the wallet standards behind every seed phrase and address (BIP 32, 39, 44, 84, 86), and the network and payment formats wallets and nodes rely on. This is a curated reading list of about 25 of them, grouped by topic, with a sentence or two on why each one matters.
Updated · 7 min read
How this list was chosen
A BIP earns a place here if it changed what every node enforces, if most wallets implement it, or if a large share of later BIPs build on it. Most entries are deployed; the rest are historic documents or newer replacements worth knowing, and every BIP page shows its current status. For the basics of what a BIP is and how one gets accepted, start with What is a BIP?.
Consensus upgrades
These BIPs changed the rules every full node checks. All were soft forks.
| BIP | Name | Why it matters |
|---|---|---|
| 16 | Pay to Script Hash (P2SH) | Lets you pay to the hash of a script, so the receiver supplies the full script only when spending. It made multisig practical and gave us "3" addresses. Enforced from April 2012. |
| 34 | Height in coinbase | Put the block height in every coinbase, making coinbases unique, and introduced activation by block version numbers. Block 227,931. |
| 66 | Strict DER signatures | Required one exact signature encoding, so validity no longer depended on how OpenSSL happened to parse signatures. Block 363,725. |
| 65 | OP_CHECKLOCKTIMEVERIFY | Lets a script lock coins until a block height or date. Used in HTLCs, escrow and Lightning. Block 388,381. |
| 68, 112, 113 | Relative timelocks (CSV) | Lock coins for a period after they confirm, and use median time for time locks. Essential for payment channels. Block 419,328. |
| 141 | Segregated Witness | Moved signatures out of the txid, fixing malleability, and replaced the 1 MB limit with 4 million weight units. Block 481,824. |
| 143 | SegWit signature hash | Made signature hashing linear instead of quadratic and made signatures commit to input amounts, a big help to hardware wallets. |
| 340 | Schnorr signatures | 64-byte signatures with 32-byte keys, batch verification and key aggregation. |
| 341 | Taproot | Outputs spendable by one key or by one hidden script from a tree. Block 709,632. |
| 342 | Tapscript | The script rules inside Taproot, with upgrade hooks for future opcodes. |
The SegWit and Taproot guides explain the two largest upgrades. Activation itself has its own key BIP: BIP 9 version bits, by Pieter Wuille, Peter Todd, Greg Maxwell and Rusty Russell, the signaling method behind CSV, SegWit and (in modified form) Taproot.
Wallets, keys and addresses
These BIPs don't change consensus, but they are why you can restore a wallet from 12 or 24 words in a different app and see the same addresses.
| BIP | Name | Why it matters |
|---|---|---|
| 32 | HD wallets | One seed generates a whole tree of keys, and an xpub can create receive addresses without being able to spend. By Pieter Wuille. |
| 39 | Mnemonic seed phrases | Encodes the wallet secret as 12 to 24 words from a list of 2,048, with a checksum and an optional passphrase. See the seed phrases guide. |
| 43 | Purpose field | Reserves the first level of the derivation path for a "purpose" number, so different wallet layouts can coexist. |
| 44 | Multi-account hierarchy | The m/44'/0'/0'/0/0 layout: purpose, coin type, account, change, index. Used for legacy "1" addresses and by many other coins. |
| 49 | Nested SegWit accounts | m/49' paths for P2SH-wrapped SegWit ("3" addresses, ypub). |
| 84 | Native SegWit accounts | m/84' paths for bc1q addresses (zpub). |
| 86 | Taproot accounts | m/86' paths for single-key bc1p addresses. |
| 173 | Bech32 addresses | The bc1 address format: one case, strong error detection, compact in QR codes. |
| 350 | Bech32m | A fixed checksum for SegWit version 1 and later, used by Taproot addresses. |
| 174 | PSBT | A standard format for passing unsigned or partly signed transactions between wallets, hardware signers and co-signers. See the PSBT guide. |
| 380 to 386 | Output descriptors | A precise text format like wpkh(...) or tr(...) for exactly which scripts a wallet uses, replacing guesswork about paths. See output descriptors. |
The derivation paths guide and address types guide go deeper, and BIP 44 vs 49 vs 84 vs 86 compares the account layouts side by side. Try the BIP 39 word list and the derivation path tool; neither ever asks for your seed.
Network and peer-to-peer
These shape how nodes find each other and move blocks and transactions.
| BIP | Name | Why it matters |
|---|---|---|
| 152 | Compact block relay | Announces new blocks with short transaction IDs, since peers usually already have the transactions. Blocks spread faster with far less bandwidth. By Matt Corallo. |
| 157, 158 | Compact block filters | Light wallets download a small filter per block and check locally whether it concerns them, instead of telling a server their addresses. See compact block filters. |
| 155 | addrv2 | A longer address message so nodes can share Tor v3, I2P and CJDNS addresses. |
| 324 | v2 encrypted transport | Encrypts traffic between nodes so observers can't simply read or tamper with it. See v2 transport. |
Payments and transactions
| BIP | Name | Why it matters |
|---|---|---|
| 21 and 321 | bitcoin: URIs | The bitcoin: link and QR format carrying an address, amount and label. BIP 321 is the newer specification meant to replace BIP 21, adding parameters such as Lightning invoices and silent payment addresses. Compare BIP 21 vs BIP 321 or build one with the Bitcoin URI tool. |
| 125 | Replace-by-fee | Lets a sender replace an unconfirmed transaction with a higher-fee version, the standard way to unstick a payment. See the RBF guide. |
The BIP process
| BIP | Name | Why it matters |
|---|---|---|
| 1 | BIP Purpose and Guidelines | The original 2011 document by Amir Taaki that defined BIPs, modeled on Python's PEPs. |
| 2 | BIP process, revised | Luke Dashjr's 2016 revision, which governed BIPs for nearly a decade. |
| 3 | Updated BIP Process | Murch's replacement for BIP 2, with four statuses (Draft, Complete, Deployed, Closed) and the types Specification, Informational and Process. |
BIP 2 vs BIP 3 explains what changed.
A reading order for beginners
If you want to read the BIPs themselves rather than summaries, this order builds up from what you already use:
- Your wallet backup: BIP 39, then BIP 32, then the path BIP your wallet uses (44, 84 or 86). Together they explain how 12 or 24 words become your addresses.
- Your addresses: BIP 173 and BIP 350 explain bc1q and bc1p addresses and why typos are caught.
- The big rule changes: BIP 141 for SegWit, then BIP 341 for Taproot. Each BIP page has a plain-English summary before the full text.
- Advanced wallets: BIP 174 for PSBTs and BIP 380 for descriptors, if you use a hardware wallet or multisig.
- Fees: BIP 125, for when a payment gets stuck.
- How it all gets decided: BIP 3 and the soft forks guide.
BIP Explorer's "core BIPs"
Separately from this editorial list, BIP Explorer marks 20 core BIPs: the live BIPs that other BIPs reference and build on most. They are:
9, 11, 16, 32, 39, 43, 44, 65, 68, 70, 112, 141, 143, 173, 174, 340, 341, 342, 350 and 380.
The two lists mostly overlap. The differences show what "core" measures: BIP 11, which made M-of-N multisig standard, and BIP 70, the old payment protocol, are cited by many later BIPs even though few people interact with them directly. You can find any of them, filter by topic or status, and see what links to what with BIP search and the BIP map.
Where to go next
- Browse by topic on the categories page, for example consensus or wallets.
- Follow how new rules could arrive in the soft forks guide, and the proposals under discussion in covenants and quantum resistance.
- See which BIPs Lightning depends on in the BIPs behind Lightning.
Frequently asked questions
What is the most important BIP?
There is no single answer, but BIP 141 (SegWit) and BIP 341 (Taproot) are the largest changes to Bitcoin's rules, and BIP 32 and BIP 39 underpin almost every wallet in use. If you hold bitcoin in a wallet with a seed phrase, BIP 39 is the one you rely on most directly.
How many BIPs are there?
More than 200 BIPs have been assigned numbers since BIP 1 in 2011, and new ones are added regularly. Numbers are assigned by the BIP editors and aren't strictly sequential: related proposals are often grouped, such as the 380s for output descriptors. BIP Explorer lists every one with its status, type and a plain-English summary.
Which BIP defines seed phrases?
BIP 39 defines the mnemonic seed phrase: 12, 15, 18, 21 or 24 words from a 2,048-word list, encoding the wallet's entropy plus a checksum. BIP 32 then turns the resulting seed into a tree of keys, and BIP 44, 49, 84 or 86 set the derivation paths for each address type.
Which BIPs define Bitcoin address types?
BIP 13 and BIP 16 define P2SH addresses starting with 3. BIP 141 defines native SegWit outputs and BIP 173 their bech32 addresses starting with bc1q. BIP 341 defines Taproot outputs and BIP 350 the bech32m encoding behind bc1p addresses. Legacy addresses starting with 1 predate the BIP process.
What does BIP stand for?
BIP stands for Bitcoin Improvement Proposal: a design document that proposes a new feature, standard or process for Bitcoin, or records information about one. The format was introduced by BIP 1 in 2011 and is now governed by BIP 3.