The Most Contended Bitcoin upgrade, BIP-119, could get a green light by the end of this year. This much-debated Bitcoin Improvement Proposal will enhance Layer 2 chains like the Lightning Network and Ark by adding functionalities similar to Ethereum smart contracts. Known as OP_CHECKTEMPLATEVERIFY (CTV), BIP-119 is backed by some of the biggest organizations in the Bitcoin ecosystem, promising to expand Bitcoin’s programmability and utility significantly.
The proposal will make Bitcoin scalable by introducing a novel mechanism called ‘convenants’. This mechanism will introduce custom restrictions like adding logic like how Bitcoin will be spent. Users could set precise conditions on transfers, making self-custody safer and more flexible. Let’s say you want to set a 0.1 BTC weekly withdrawal limit. This Bitcoin upgrade will make it happen.
Why is BIP – 119 A Big Deal?
Bitcoin upgrades take a lot of time and effort to come into effect. The last upgrade happened in 2020 – The Taproot Upgrade. These upgrades take time owing to Bitcoin’s governance structure. Since networks like Bitcoin are not governed by any single agency or venture capitals, it takes the entire network’s consensus. Meaning, the government holdings or ETF solution providers are not the only one giving a green flag. It considers every participant on the network. Unlike Bitcoin, Ethereum’s EIP processes are comparatively more swift. Vitalik’s recent EIP proposal is an evidence of it.
How Is The Bitcoin Community Working Towards This Update Approval?
Jeremy Rubin, BIP-119’s author, suggested a “Speedy Trial” back in 2022, which would have let miners quickly approve it with 90% signaling. But many in the community balked, worried it gave too much power to miners while ignoring the thousands of node operators who actually enforce Bitcoin’s rules.
On June 9, 2025, a group of 66 bitcoin protocol developers signed an open letter to the technical Bitcoin community in an attempt to get them to adopt BIP -119 and other proposals (CSFS/ BIP-348).
CSHF is an important update as it will allow a verifier on Bitcoin to check the validity of the signature irrespective of the message in the transaction. This is a significant leap in flexibility. It means that Bitcoin scripts could verify signatures that aren’t directly tied to the transaction spending the funds.
Signatories of the letter stated,
“Significant benefits that these changes would bring to end-users of bitcoin,” including boosts to Bitcoin layer-1 security and Bitcoin layer-2 scaling solutions.“
Daniel Gray, senior research analyst at Fidelity Digital Assets, commented,
“Any Bitcoin upgrades, including BIP-119, are going to be significant because of how distributed the network’s consensus rules have become,”
Explaining Covenants For Beginners
This upgrade will introduce a new mechanism called Covenants. This functionality will allow developers to build custom smart contracts for Bitcoin wallets. With the introduction of smart vaults in Bitcoin safekeeping, users will be able to set the amount of Bitcoin that can be moved from a certain wallet from time to time. This customization of transaction capping is likely to make Bitcoin DeFi more prominent and safe for users.
In a recent Fidelity Digital Assets research report, Gray wrote,
“Covenants could be useful for creating smart contracts “previously thought to be too complex and too risky to implement on Bitcoin’s Layer-1.”
Industry’s Take on BIP – 199
Developer Luke Dashjr suggested that Bitcoin upgrades should be done using UASF. The “UASF process” likely refers to the User Activated Soft Fork process, which is a method for updating a blockchain protocol.
It involves users and nodes on the network collectively activating a new set of rules for the blockchain, essentially upgrading the system without a hard fork.
Steven Roose, CEO, Second Tech commented,
“I believe it would be a big deal for Bitcoin, certainly in the near term.”
Daniel Gray, Senior Digital Asset Research Analyst, Fidelity Digital Assets explained why BIP -119 is important in his blog,
“Take the Lightning Network, a payment scaling layer on the Bitcoin network that has experienced significant growth since its 2018 launch. Whereas ordinary layer-1 Bitcoin transactions might take an average of 10 minutes to settle, Lightning transactions occur at something approaching the speed of light and at a negligible cost. This combination enables bitcoin payments to be used for day-to-day purchases such as a cup of coffee.”
Developers Urging The Bitcoin Technical Community
The letter signed by Bitcoin developers (protocol) is an awakening pushed to the core developers to prioritize BIP-199 and other proposals BIP-348 over the next six months. The protocol developers commented that they are not trying to dictate the process of passing a BIP. They emphasised that,
“It is an acknowledgement that before these opcodes can be activated, they must be implemented in the most widely used bitcoin client.”
With these statements, it is now obvious that new upgrades for Bitcoin are underway. As per the discussions happening in the community, if the BIP 199 does get a green signal by the end of the year then it would be deemed as the fastest upgrade to be approved by the community till date.