Bitcoin Out Loud Video: The CHIP Process

My name is John Moriarty. I run the Bitcoin Out Loud YouTube channel, and I’ve done various jobs in the BCH space, including content production, copy writing/editing, and project management.I’m running this fundraiser to fund the production of an explainer video about Bitcoin Cash’s CHIP Process.Here’s the cost breakdown:-Final Storyboarding, Design, and Animation: $1500-Script writing, voiceover, production, management: $2500-Fundme.cash listing fee: 0.01 BCH-Fundme.cash 1.5% fee$1500+$2500 = $4000 //subtotal$4000 100/98.5 ~= $4060.91 //1.5% fundme.cash fee$4060.91/$354.43 BCH ~= 11.4575797 BCH // convert to BCH11.4575797 BCH + 0.01 BCH = 11.5575797 BCH //0.01 BCH listing feeHere’s the script:Bitcoin was designed to be a decentralized digital currency, a payment network where there’s no one person or group of people in charge.Being decentralized gives Bitcoin various advantages over centralized systems.But decentralization also makes coordination much more difficult. Without a CEO or committee to direct it, how can the network reach consensus on any decisions that need to be made? For example, how could the Bitcoin network decide whether or not to implement a proposed update?INTRO*The history of Bitcoin and later Bitcoin Cash is a prime example of how difficult reaching decentralized consensus can be. The so-called Scaling Debate dramatically split the Bitcoin blockchain in two, even when a plan for scaling Bitcoin existed from the beginning.While agreeing on the need to increase the blocksize limit was a good starting point, that didn’t solve decentralized consensus, and Bitcoin Cash would undergo 2 more chain splits, one in 2018 and one in 2020.These splits hurt confidence in BCH’s long term viability, and shrunk the community. But important lessons were learned in the process.Maybe the most important lesson was that, without some sort of established process, the result isn’t just chaos; it’s much worse. Bad actors can end up in influential positions and then stall good proposals indefinitely or rush bad proposals through, leading to contentious chain splits.So what is the CHIP process?Short for Cash Improvement Proposal, the CHIP process is a framework designed to help decentralized communities like Bitcoin Cash reach consensus on a proposed change while avoiding chain splits and other damaging outcomes.Since its introduction, every successful Bitcoin Cash protocol upgrade has been proposed as a CHIP.But it’s important to note that the CHIP process is not the “official” consensus process for Bitcoin Cash. Nothing can be official for a truly decentralized network. It’s just one method that has had success so far.The CHIP process centers around a public, living document maintained by an explicit owner (or owners). That document is called… a CHIP.A CHIP includes much more than a technical specification, although that’s there too. In total there are 12 sections.The Motivation and Benefits section describes how the upgrade or change will practically benefit stakeholders. What need is there that this change fulfills, or what problem needs addressing?The Technical Description and Specification sections will have things like protocol formats, parameters, and workflows.The Costs and Risks sections recognize how any stakeholders could be negatively impacted by the proposed change. Who exactly will need to react to the change and what are the associated costs in the long term?The Current Implementations and Tests Cases sections cover where the proposal is already implemented, and the evidence that the change works as expected.The Evaluation of Alternatives section is where other possible solutions should be listed and addressed. What about options that are more powerful but less tested, or solutions that are less powerful but more widely understood? What about doing nothing? This section is pivotal because it provides a starting point for discussion around sources of conflict.The Security Considerations section should address risks specifically related to security. Does the proposal touch consensus-critical code? Could it create a vulnerability to denial of service attacks?Finally, the List of Major Stakeholders section broadly recognizes which groups of network participants are stakeholders for the proposed change while the Statements section shares the feedback gathered from specific stakeholders.By requiring public documentation of stakeholder positions, the CHIP process acknowledges conflict as a necessary part of reaching robust consensus. The goal is to air out disagreements in a structured way, so that they can be examined and resolved, rather than letting them fester behind closed doors.Lack of clear schedules can lead to prolonged conflicts, so there is a suggested schedule covered in the CHIP specification. In most cases, the status of the CHIP document should make it overwhelmingly clear whether it has reached consensus at least 6 months before the date of the proposed change.A CHIP that hasn’t gained enough support by that time can choose to update their timeline and continue campaigning for a later upgrade. A CHIP that has gained enough support will already have all major stakeholders onboard and prepared to implement the change.The CHIP Process is not without limitations. Because a CHIP is largely defined by the CHIP owner, it's crucial for stakeholders to critically evaluate the quality of each CHIP. Is the stakeholder list comprehensive? Are the risks and alternatives adequately addressed? The strength of the process relies on the informed judgment of its participants.It’s also worth pointing out that the CHIP process isn’t a decision making process. There is no vote, and no one can be forced to run or not run software. Instead, the CHIP process is a consensus building process. It’s a practical template built to make reaching consensus easier and less costly.Where the CHIP process excels is in providing a clear framework—a path to navigate the challenges of decentralized coordination, with stability as a core goal.