2025 Bitcoin Protocol Layer Full Review

Written by: Zhixiong Pan

Bitcoin Optech’s annual summary has long been regarded as a technical weather vane for the Bitcoin ecosystem. It does not focus on price fluctuations but records the most authentic pulse of Bitcoin protocol and key infrastructure.

The 2025 report reveals a clear trend: Bitcoin is undergoing a paradigm shift from “passive defense” to “proactive evolution.”

Over the past year, the community has moved beyond merely patching vulnerabilities to systematically addressing existential threats (such as quantum computing), and aggressively exploring the boundaries of scalability and programmability without sacrificing decentralization. This report is not only a developer’s memo but also a key index for understanding the asset properties, network security, and governance logic of Bitcoin over the next five to ten years.

Core Conclusions

Looking ahead to 2025, Bitcoin’s technological evolution exhibits three core features, which are also the key to understanding the following 10 major events:

Preemptive Defense: The defense roadmap against quantum threats has become clearer and more practical for the first time, extending security thinking from “the present” to the “post-quantum era.”

Layered Functionality: High-density discussions on soft fork proposals and the “hot-swappable” evolution of the Lightning Network demonstrate that Bitcoin is achieving its architectural goal of “bottom-layer stability, upper-layer flexibility” through layered protocols.

Decentralization of Infrastructure: From mining protocols (Stratum v2) to node verification (Utreexo/SwiftSync), substantial engineering resources have been invested to lower participation barriers and enhance resistance to censorship, aiming to counteract the centralizing forces in the physical world.

Bitcoin Optech’s annual report covers hundreds of code commits, heated discussions in mailing lists, and BIP proposals over the past year. To extract true signals from technical noise, I have filtered out updates limited to “local optimization” and selected the following 10 events with structural impact on the ecosystem.

1. Systematic Defense Against Quantum Threats and “Hardening Roadmap”

【Status: Research and Long-term Proposals】

2025 marks a qualitative change in the Bitcoin community’s attitude toward quantum computing threats, shifting from theoretical exploration to engineering preparedness. BIP360 has been assigned a number and renamed to P2TSH (Pay to Tapscript Hash). This is seen as an important stepping stone for the quantum hardening roadmap and more generally serves certain Taproot use cases (such as commitment structures that do not require internal keys).

Meanwhile, the community has delved into more specific quantum-safe signature verification schemes, including plans to introduce corresponding scripting capabilities in the future (such as reintroducing OP_CAT or adding new signature verification opcodes), constructing Winternitz signatures with OP_CAT, discussing STARK verification as a native script capability, and optimizing on-chain costs for hash-based signature schemes (such as SLH-DSA / SPHINCS+).

This topic ranks first because it touches the mathematical foundation of Bitcoin. If quantum computing in the future truly weakens the elliptic curve discrete logarithm assumption (thus threatening the security of ECDSA/Schnorr signatures), it will trigger systemic migration pressures and security layering of historical outputs. This forces Bitcoin to prepare upgrade paths at the protocol and wallet levels in advance. For long-term holders, choosing custodial solutions with upgrade roadmaps and security audit cultures, as well as paying attention to potential migration windows, will become essential for asset preservation.

2. Explosion of Soft Fork Proposals: Building Blocks for “Programmable Vaults”

【Status: High-density Discussions / Draft Stage】

This year was marked by intense discussions on soft fork proposals, focusing on how to enhance script expressiveness while maintaining minimalism. Contract proposals such as CTV (BIP119) and CSFS (BIP348), as well as technologies like LNHANCE and OP_TEMPLATEHASH, aim to introduce more secure “restrictive clauses” into Bitcoin. Additionally, OP_CHECKCONTRACTVERIFY (CCV) has become BIP443, and various arithmetic opcodes and script recovery proposals are queued for consensus.

These seemingly obscure upgrades are actually adding new “physical laws” to the global value network. They are expected to make native “Vault” structures simpler, safer, and more standardized, enabling users to set mechanisms like delayed withdrawals and revocation windows, thus achieving “programmable self-protection” from the protocol’s expressiveness layer. Meanwhile, these capabilities are expected to significantly reduce interaction costs and complexity for second-layer protocols such as the Lightning Network and DLCs (Discrete Log Contracts).

3. Reconstructing Censorship Resistance in Mining Infrastructure

【Status: Experimental Implementation / Protocol Evolution】

Decentralization at the mining layer directly determines Bitcoin’s censorship resistance. In 2025, Bitcoin Core 30.0 introduced an experimental IPC interface, greatly optimizing the interaction efficiency between mining pool software/Stratum v2 services and Bitcoin Core verification logic, reducing reliance on inefficient JSON-RPC, and paving the way for Stratum v2 integration.

One of the key capabilities of Stratum v2 is to further decentralize transaction selection by enabling mechanisms like Job Negotiation, thereby enhancing censorship resistance. Meanwhile, the emergence of MEV pools attempts to address MEV issues through anonymized templates and market competition: ideally, multiple marketplaces should coexist to prevent a single market from becoming a new central hub. This directly relates to whether ordinary users’ transactions can still be fairly included under extreme conditions.

4. Immunity System Upgrades: Vulnerability Disclosure and Differential Fuzzing

【Status: Ongoing Engineering Operations】

Bitcoin’s security depends on self-assessment before real attacks. In 2025, Optech documented numerous vulnerability disclosures affecting Bitcoin Core and Lightning implementations (such as LDK/LND/Eclair), covering issues from funds being stuck to privacy de-anonymization and even severe coin theft risks. This year, Bitcoinfuzz used “Differential Fuzzing” to compare responses of different software to the same data, uncovering over 35 deep bugs.

This intense “stress testing” signifies ecosystem maturity. It’s like a vaccine: although it exposes flaws in the short term, it significantly enhances system immunity in the long run. For users relying on privacy tools or Lightning, it also serves as a wake-up call: no software is perfect, and keeping key components updated is the simplest rule to ensure safe holdings.

5. Lightning Network Splicing: Hot Updating Channel Funds

【Status: Cross-Implementation Experimental Support】

In 2025, Lightning Network achieved a major usability breakthrough: Splicing (channel hot updates). This technology allows users to dynamically adjust channel funds (recharge or withdraw) without closing the channel. It is now supported experimentally in LDK, Eclair, and Core Lightning. Although the related BOLTs specifications are still being refined, cross-implementation compatibility testing has made significant progress.

Splicing is the key capability for “adding or subtracting funds without closing the channel.” It is expected to reduce payment failures and operational friction caused by inconvenient channel fund adjustments. Future wallets may significantly lower the engineering learning curve for channels, making LN more like a “balance account” payment layer, which is crucial for Bitcoin payments to become widely used in daily life.

6. Revolution in Verification Costs: Running Full Nodes on “Ordinary Devices”

【Status: Prototype (SwiftSync) / Draft BIP (Utreexo)】

Decentralization’s moat lies in verification costs. In 2025, SwiftSync and Utreexo made a positive impact on the “full node threshold.” SwiftSync optimizes UTXO set writing during IBD: it only adds unspent outputs at the end of IBD, using a “minimal trust” hints file, accelerating IBD by over 5 times in sample implementations and enabling parallel verification. Utreexo (BIP181-183) uses Merkle forest accumulators, allowing nodes to verify transactions without storing the full UTXO set locally.

Advances in these technologies mean running full nodes on resource-constrained devices becomes feasible, increasing the number of independent verifiers in the network.

7. Cluster Mempool: Reshaping Fee Market Scheduling

【Status: Near Release (Staging)】

In Bitcoin Core 31.0, the implementation of Cluster Mempool (cluster memory pool) is nearing completion. It introduces structures like TxGraph, abstracting complex transaction dependencies into efficiently solvable “transaction clustering and ordering” problems, making block template construction more systematic.

Although this is a low-level scheduling system upgrade, it is expected to improve fee estimation stability and predictability. By eliminating abnormal packing orders caused by algorithmic limitations, the future Bitcoin network will perform more rationally and smoothly under congestion, and user-initiated acceleration transactions (CPFP/RBF) will work under more predictable logic.

8. Fine-tuning Governance of P2P Propagation Layer

【Status: Policy Update / Ongoing Optimization】

In response to the surge of low-fee transactions in 2025, Bitcoin’s P2P network underwent a strategic turning point. Bitcoin Core 29.1 lowered the default minimum relay fee to 0.1 sat/vB. Meanwhile, the Erlay protocol continued to advance to reduce node bandwidth consumption; proposals like “block template sharing” were also introduced, and strategies for compact block reconstruction are being optimized to cope with increasingly complex propagation environments.

With more consistent policies and lower default thresholds for nodes, the feasibility of propagating low-fee transactions is expected to improve. These directions aim to reduce bandwidth requirements for running nodes and further maintain network fairness.

9. OP_RETURN and the “Tragedy of the Commons” Debate over Block Space

【Status: Mempool Policy Change (Core 30.0)】

Core 30.0 relaxed OP_RETURN policy restrictions (allowing more outputs, removing some size limits), sparking intense philosophical debates about Bitcoin’s usage in 2025. Note that this pertains to Bitcoin Core’s Mempool Policy (default relay/standardness policy), not consensus rules; but it significantly affects transaction propagation and visibility to miners, thus impacting the competitive landscape of block space.

Supporters argue it corrects incentive distortions, while opponents worry it endorses “on-chain data storage.” This debate reminds us that block space, as a scarce resource, is subject to continuous interest-based negotiations, even at the non-consensus layer.

10. Bitcoin Kernel: Componentization and Re-architecture of Core Code

【Status: Architectural Rebuild / API Release】

In 2025, Bitcoin Core took a key step toward decoupling architecture: introducing the Bitcoin Kernel C API. This marks the separation of “consensus verification logic” from the large node program into an independent, reusable standard component. Currently, this kernel supports external projects in reusing block verification and chain state logic.

“Kernelization” will bring structural security benefits to the ecosystem. It allows wallet backends, indexers, and analysis tools to directly invoke official verification logic, avoiding risks of consensus divergence caused by re-implementations. It’s like providing a standardized “factory engine” for the Bitcoin ecosystem, enabling more robust applications built upon it.

Appendix: Glossary (Mini-Glossary)

To assist reading, here are brief definitions of key terms:

UTXO (Unspent Transaction Output): The basic unit of Bitcoin ledger state, representing who owns how many coins.

IBD (Initial Block Download): The process of synchronizing historical data when a new node joins the network.

CPFP / RBF: Two transaction acceleration mechanisms. CPFP (Child Pays For Parent) relies on new transactions to incentivize the inclusion of older ones; RBF (Replace-By-Fee) allows replacing low-fee transactions with higher-fee ones.

Mempool (Memory Pool): Buffer where nodes store “broadcast but not yet confirmed” transactions.

BOLTs: Technical specifications of the Lightning Network (Basis of Lightning Technology).

MEV (Maximal Extractable Value): The maximum extractable value, referring to the additional profit miners can obtain through transaction reordering or censorship.