BIP stands for Bitcoin Improvement Proposal. It is a document that outlines changes or enhancements to Bitcoin’s protocol, infrastructure, or processes. Each BIP serves as a blueprint for potential updates, guiding developers and stakeholders on proposed modifications.

BIPs can cover a range of topics, including new features, optimizations, or fixes for existing issues. Each proposal is assigned a unique identifier (e.g., BIP-001) and goes through a review process. This typically involves discussions among developers and the community to assess the impact and feasibility of the proposed changes.

One of the most notable BIPs is BIP-44, which established a standard for hierarchical deterministic wallets, enhancing wallet functionality and user experience. BIPs are essential for the evolution of Bitcoin, allowing it to adapt and grow over time while ensuring that any changes are well-considered and community-driven.