Welcome to Crypto Jargon,
the series where I break down the complex terms used in reference to cryptocurrencies and blockchain tech.
In this episode of Crypto Jargon, we take a closer look at the following terms
BPI, EIP and ERC20
starting with BIP,
BIP which stands for Bitcoin Improvement Proposal
a document outlining technical specifications on how to improve the Bitcoin protocol
since, Bitcoin is governed by a mutual consensus
The author of the document presents it to the bitcoin community as a proposal
The person behind the BIP is also responsible for collecting and documenting
both positive and negative input from the community and
and if If there is a majority consensus on a BIP
the change gets approved and it can be implemented in the protocol
This is how Segwit upgrade was implemented years after it was first proposed
It took quite some time for it to win over the majority of the miners
who had to signal their agreement for it.
Segwit by the way, is explained in another video.
You will find it linked in the description box, so check it out.
BPI is something very different to BIP do not confuse the two,
it stands for Bitcoin Price Index
and it represents the summed average of Bitcoin prices
based on collected data from a wide range of exchanges across the globe.
It applies aggregated statistics
to reach a more balanced and realistic picture
on the currencies market value at present
It was created by the us-based exchange Coinbase in 2013
You know when you go to Coinmarketcap.com
or even just on Google and you check the price of Bitcoin, against US dollar for instance,
or bitcoin against Euro, there is one unified price
This is the current market value of Bitcoin.
Well, this is how it’s estimated.
It’s a collected data from many different exchanges,
and this is how we get that average amount
which is what is considered to be
the most adequate current price.
Next on my list is EIP, which is pretty much the same as BIP
but for the Ethereum platform
It stands for Ethereum Improvement Proposal
and it sets out the technical standards such as protocol specifications,
contract standards, client APIs and much more for the Ethereum blockchain
Speaking about Ethereum,
Let’s also take a look here at the most popular Ethereum token standard ‘ERC20’
This is a technical standard for tokens built on the theory on blockchain platform via smart contracts
ERC stands for Ethereum Request for comment
and 20 is the number that is assigned to that request.
Most of the tokens built on the Ethereum blockchain are in fact ERC20 tokens
But there are many other standards like ERC-777, ERC-1410
ERC-1644 and much more,
all with different functionality and limitations to what use they serve
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