Pan Zhixiong: A comprehensive review of the Bitcoin protocol layer in 2025

From quantum defense to core rearchitecture, the top ten technological shifts sorted by influence.

Bitcoin Optech’s annual summary has long been regarded as a barometer of technological trends in 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 “active 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 memo but also a key index for understanding Bitcoin asset properties, network security, and governance logic 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:

1. Defense Front-Loading: The roadmap for defending against quantum threats has become clear and practically implementable for the first time, extending security thinking from “the present” to the “post-quantum era.”

2. Functional Layering: High-density discussions on soft fork proposals and the “hot-swappable” evolution of the Lightning Network demonstrate that Bitcoin is achieving “bottom-layer stability and top-layer flexibility” through layered protocols.

3. Infrastructure Decentralization: From mining protocols (Stratum v2) to node verification (Utreexo/SwiftSync), substantial engineering resources are dedicated to lowering participation barriers and enhancing resistance to censorship, aiming to counteract the centralizing forces of 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 meaningful signals from technical noise, I have filtered out updates limited to “local optimizations” 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 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 without 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 (like 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 (threatening the security of ECDSA/Schnorr signatures), it will trigger systemic migration pressures and security layering for historical outputs. This compels 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, and paying attention to potential migration windows, will be essential for asset preservation.

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

【Status: High-Density Discussions / Draft Stage】

This year has seen a high density of soft fork proposals, focusing on how to enhance script expressiveness while maintaining minimalism. Contract proposals like CTV (BIP119) and CSFS (BIP348), as well as technologies like LNHANCE and OP_TEMPLATEHASH, aim to introduce safer “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 “Vaults”-like structures simpler, safer, and more standardized, enabling mechanisms such as delayed withdrawals and revocation windows from the protocol expressiveness layer, achieving “programmable self-protection.” Meanwhile, these capabilities are expected to significantly reduce interaction costs and complexity for second-layer protocols like Lightning and DLCs (Discrete Log Contracts).

3. Rebuilding Mining Infrastructure for “Censorship Resistance”

【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 Stratum v2’s key capabilities is (when enabling mechanisms like Job Negotiation) to further delegate transaction selection rights from mining pools to more decentralized miners, enhancing censorship resistance. Meanwhile, the emergence of MEVpool attempts to address MEV issues through blind templates and market competition: ideally, multiple marketplaces should coexist to avoid a single market 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 relies on self-assessment before real attacks. In 2025, Optech documented numerous vulnerability disclosures targeting 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”—comparing responses of different software to the same data—to identify over 35 deep bugs.

This intense “stress testing” signals ecosystem maturity. It is akin to a vaccine: although it exposes issues in the short term, it significantly enhances systemic 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 for safeguarding funds.

5. Lightning Splicing: “Hot” Channel Fund Updates

【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 to “add or subtract funds without closing the channel.” It is expected to reduce payment failures and operational friction caused by inconvenient fund adjustments. Future wallets may significantly lower the learning curve for channel engineering, 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 Cost: Running Full Nodes on “Ordinary Devices”

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

The moat of decentralization lies in verification costs. In 2025, SwiftSync and Utreexo made positive impacts on the “full node threshold.” SwiftSync optimizes UTXO set writing during IBD: it only adds outputs to chainstate if they remain unspent at the end of IBD, and uses a “minimal trust” hints file to accelerate IBD by over 5 times in sample implementations, also 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 (clustered 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-Grained Governance of P2P Propagation Layer

【Status: Policy Updates / Continuous Optimization】

In response to the surge of low-fee transactions in 2025, Bitcoin P2P network underwent a strategic turning point. Bitcoin Core 29.1 lowered the default minimum relay fee rate to 0.1 sat/vB. Meanwhile, the Erlay protocol continued to advance to reduce node bandwidth consumption; proposals like “block template sharing” were introduced, and strategies for compact block reconstruction were continuously 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 in 2025 about Bitcoin’s usage. Note that this pertains to Bitcoin Core’s Mempool Policy (default relay/standardness), 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 governance, even at the non-consensus layer.

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

【Status: Architectural Reorganization / 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): Unspent transaction output, the basic unit of Bitcoin ledger state, recording ownership and amount. · 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 confirmation of older ones; RBF (Replace-By-Fee) allows replacing low-fee transactions with higher-fee ones. · Mempool (Memory Pool): Buffer zone where nodes store “broadcasted but unconfirmed” transactions. · BOLTs: Technical specifications of the Lightning Network (Basis of Lightning Technology). · MEV (Maximal Extractable Value): The maximum extractable value, referring to additional profit miners can obtain through transaction reordering or censorship.