Bitcoin Improvement Proposal 21, or BIP-21, introduces a standardized URI and QR code generation scheme, allowing for broader compatibility across different Bitcoin wallets to simplify payments on the network.
Bitcoin is undoubtedly one of the greatest technological and financial innovations ever created in the world, and also one of the most complex for a significant number of people. Although the number of Bitcoin users has been increasing significantly in recent years, there are still many people with little or no experience with Bitcoin, which makes it difficult for them to use this cryptocurrency to send or receive payments.
The complexity of using Bitcoin increases when we talk about the Lightning Network, a second-layer protocol designed to improve the scalability of the network and cope with the massive and global adoption of cryptocurrencies.
Companies working with this technological innovation have created different Bitcoin wallets with the aim of facilitating payments. However, the many options available to choose between sending or receiving payments on the main chain or using a solution like the Lightning Network can be quite confusing.
The developers' goal with the creation of BIP-21 is to introduce a standardized URI and QR code generation scheme, allowing for broader compatibility between different Bitcoin wallets to simplify payments on the network.
In this way, users can make or receive payments from or to a BTC address on the mainnet or to an invoice on the Lightning Network. All this in one place and without incompatibilities, simply by scanning QR codes, explains the company. improvement proposal.
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BTC Transactions on Bitcoin and Lightning Network
The Bitcoin network was created as an alternative digital money solution. However, in its original format, Bitcoin is programmed to process transactions approximately every 10 minutes; in addition, the network's scalability is quite low, being able to process about 8 transactions per second (TPS). This reality undermines Bitcoin's potential as a global means of payment.
Through the Lightning Network, developers solve this problem, allowing users to transact with BTC instantly and at a fairly low cost. However, as it is a second-layer solution, transactions on the Lightning Network occur in off-chain payment channels, and it is not until these channels are closed that the transactions are included in a block on the main Bitcoin network. In addition, on the Lightning Network, users must use payment invoices instead of addresses, which can lead to further confusion when sending a BTC payment.
BIP-21, unifying Bitcoin payments in one place
BIP-21 was introduced in January 2012 by developers Nils Schneider and Matt Corallo, building on the previous improvement proposal, BIP-20, by developer Luke Dashjr.
Since then, BIP-21 has been one of the predominant means of making payments via Bitcoin, widely adopted by wallet providers and QR code-based payment gateways used within this network. However, wider adoption by those using the Lightning Network is still lacking.
Therefore, when using a Bitcoin wallet that implements BIP-21 to send value to another that does not use this standard, an error is generated for users that limits their user experience.
At last week’s Bitcoin Takeover conference, Bitcoin developers emphasized the importance of driving BIP-21 adoption in Lightning Network wallets, in order to unify and simplify payments on the network. This will also help Bitcoin improve its interoperability to cover a wider variety of applications and potential use cases.
In 2019, Monochrome Asset Management founder Jeff Yew showed off a successful BTC transaction from a Bitcoin address to a Lightning Network payment invoice.
In addition to pushing for the adoption of the BIP-21 Improvement Proposal, the Bitcoin community is also seeking to promote the implementation of BIP-47, to enable the generation of reusable Bitcoin payment addresses in order to protect our privacy at all times. The Sparrow Bitcoin Wallet Anadio This standard was implemented in its v1.6.2 version in the middle of this month.
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