Taproot, Bitcoin’s Highly-Anticipated Update Goes Live At Block 709,632

Taproot, Bitcoin’s Highly-Anticipated Update Goes Live At Block 709,632

Bitcoin’s highly anticipated upgrade, Taproot, finally went live today, allowing developers to integrate new features with the Bitcoin network, allowing better scalability, privacy, and security on the network.

Miners Signal Their Support

In June, the upgrade was locked, with over 90% of the miners “signaling” their support. Once the support was locked in, a waiting period was initiated between the lock-in and the activation date. This period has given the node operators the time required to upgrade to the latest version of Bitcoin Core, 21.1. This version contains the merged code for Taproot.

An Introduction To Taproot

Taproot consists of several technical innovations throughout the history of Bitcoin; all rolled into one upgrade. Taproot was first proposed by Greg Maxwell back in 2018. Since the proposal, three Bitcoin Improvement Proposals or BIPs were written by Pieter Wuille, Tim Ruffing, A.J. Townes, and Jonas Nick. These proposals were merged into the Bitcoin Core in October 2020.

Schnorr Signatures

The Schnorr Signatures are at the heart of the upgrade. Currently, Bitcoin uses a cryptographic scheme, ECDSA, for all its digital signatures, with users signing a transaction using their private key to approve it. Taproot uses the Schnorr scheme, with transactions using Taproot will utilize this scheme. Schnorr will boost the privacy, security, and scale of Bitcoin transactions through the addition of newer capabilities.

Schnorr is also faster and smaller than ECDSA, with linear signatures. This would boost privacy, allowing for more complex smart contracts. Taproot will have several positives for projects in the Bitcoin ecosystem, such as cheaper multi-signature transactions.

Improving Privacy And Scalability

Taproot is also seen as an effort to improve the privacy of Bitcoin. Bitcoin is highly transparent, with every transaction sent on the network traceable. While Taproot will still ensure transparency, details about complex transactions that utilize smart contracts will be hidden.

The Taproot upgrade also addresses Bitcoin’s scalability problem through the use of Schnorr signatures. Schnorr signatures can combine multiple signatures into one, significantly reducing the amount of data on the blockchain.

The Way Forward

A little over half of the Bitcoin nodes are currently signaling their support, while the remaining are still using the old software. They will first need to upgrade to Bitcoin Core 21.1 before they can enforce Taproot. Miners who do not upgrade to the new software will be unable to mine on the network. So far, over 90% of miners have indicated their willingness to upgrade to the new software.

There will still be a considerable amount of work to be done for the upgrade to take effect fully. Users will also be unable to send or receive the new transactions until the Bitcoin wallet they are using supports it. This could take a while as most wallets do not support it at the moment. Bitcoin’s last major upgrade, SegWit, took almost two years to reach adoption levels of 50%.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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