What to expect from Taproot, the biggest upgrade to the bitcoin network in 4 years
- The biggest upgrade to the
bitcoinnetwork in four years is slated to happen over the weekend.
- Unlike the last upgrade in 2017,
Taproothas received near-universal support in the bitcoin community.
- Here's what you need to know, from the BIPs to what this may mean for the network.
The biggest upgrade in bitcoin's network in four years is slated to happen over the weekend. Here's what you need to know.
Taproot is the first change to bitcoin's protocol since SegWit, the last upgrade which took place in July 2017.
Unlike the highly controversial SegWit, which caused a "civil war" in the bitcoin community, Taproot has received a near-universal consensus, Ninos Mansor, partner at Arrington XRP Capital Partner, a
The upgrade is aimed primarily at making the cryptocurrency's network more private, secure, and scalable, encompassed by three separate Bitcoin Improvement Proposals or BIPs. These are:
- BIP340 - replaces Elliptic Curve Digital Signature Algorithm with Schnorr Signatures, a cryptographic scheme that makes complex bitcoin transactions simpler and more secure.
- BIP341 - builds on the SegWit upgrade and improves bitcoin privacy while lowering transaction fees. It also introduces MAST, which allows users to lock outputs to multiple scripts.
- BIP342 - reforms Bitcoin's scripting language and introduces "Tapscript," which changes how signatures are evaluated. It also takes advantage of Schnorr signatures.
The upgrade is also aimed at equipping the world's largest digital asset by market cap to be able to compete more with assets like ethereum, which is known for its programmable smart contracts.
Mansor elaborates on these proposals in the 29-page report published last month. But more than the technicalities of the upgrades, it is the act of upgrading the network that is just as important, he said.
"The upgrade could be a macro turning point for evolvability and innovation, merging the best of post-Segwit conservatism with the energy of new beginnings," Mansor wrote in the report. "It is a meta-upgrade, a chance to redefine what it means to contribute to bitcoin, whether one is a miner, developer, or full node."
And even if Taproot will only introduce marginal changes, Mansor told Insider the upgrade is crucial as it sets the protocol up for future ones. This, he said, will also debunk theories that bitcoin is "stagnant."
But how will the upgrade affect retail traders? For starters, bitcoin transactions will be more affordable, more secure, and more private, Mansor said. Keys, for instance, will not be as exposed on the chain because multisig outputs, single sig outputs, and other complex smart contracts will all look the same. "People will be even more confident in the network," he added.
Taproot was approved by miners around the world in June 2021 after being initially proposed by core developer Gregory Maxwell in January 2018. The long lead time between the proposal and the activation has to do with the numerous rounds of reviewing and testing.
Simply put, Taproot is set to make bitcoin's network better and more robust, Mansor said. "It makes complicated transactions easier to achieve while improving privacy and scalability."
- A 29-year-old woman found a mark on her head and was diagnosed with a fungal infection. It turned out to be invasive skin cancer.
- Elon Musk told his 76-year-old dad Errol to 'keep quiet' in a text message after he said he wasn't proud of his son, report says
- JPMorgan CEO Jamie Dimon told wealthy clients there's a chance the US is heading into 'something worse' than a recession, report says
- Nepotism and termite-like corruption dented India : Modi
- Modi lists five pledges to turn India into a developed country in 25 years
- There will be a major shift in the way Indians shop and consume brands
- Modi remembers Nehru and Sarvarkar in his speech today
- Made-in-India gun used for 1st time for ceremonial salute at Red Fort on Independence Day