TL;DR Breakdown
- A new bitcoin upgrade is expected this weekend.
- Taproot upgrade will enable more innovations on bitcoin.
- The development marks the beginning of better innovations within the network.
Bitcoin is expecting a significant upgrade known as Taproot this weekend. All eyes are on this considerable development as it will be a significant mark in history. The coin’s last major upgrade was in 2017. The change will take place on block 709,632 and will improve the blockchain‘s functionality.
With Taproot, programmers will be allowed to introduce modern features that will address stability issues. The upgrade also targets remodeling privacy on the network. Smart contract functions will also see significant enhancements to compete with Ethereum‘s programmable smart contracts.
Bitcoin has been taking its time to implement upgrades. Taproot came to being in 2018 and was locked in back a few months ago. The majority of miners signaled their approval for the new development on Bitcoin. Several bitcoin investors are excited and optimistic about the impact it will have on the network.
Bitcoin Core version 21.1, which has the merged code for Taproot, is close, and everyone is eager. Node operators and miners now have a lock-in and activation period to upgrade to the latest version fully.
Once they have upgraded, the network will implement new regulations and better features. Taproot will also introduce Schnorr signatures that will make transactions affordable. Moreover, the feature will improve confidentiality in the network.
Some experts are uncertain whether Taproot will trigger bitcoin to surge. However, many people are optimistic that it will improve the network in the long run.
Smart contracts
Taproot has brought in several proposed upgrades to introduce one superior one. Katherine Dowling, general counsel, and chief compliance officer at Bitwise Asset Management, says the most significant change from the development is smart contracts.
According to Dowling, schnorr signatures have an advantage in letting bitcoin users enforce multiple options for smart contracts. Moreover, there will be more complex use cases. She notes that it will be a first of its kind in the network.
Dowling added that bitcoin had taken a lot of time accommodating smart contracts compared to Ethereum. However, she noted with Taproot that the gap would be smaller since the daily usage of bitcoin will go up.
Privacy and affordable transaction fees
The Taproot upgrade will also increase privacy using Schnorr signatures. Bitcoin will enable multi-signature transactions to appear like one transaction. Multi-signature transactions will look like standard transactions. As a result, there will be greater anonymity for addresses involved. This will further ensure the privacy of transactions. Schnorr signatures would also cut down the amount of data used for multi-signature transactions. These transactions are usually more complex to execute than single transactions.
Tyrone Ross, CEO of Onramp Invest, noted that transactions would run faster. Moreover, the upgrade would lead to energy being saved with limited data involved. This will, in turn, lead to affordable processing fees, leading to cheaper transaction fees. The development is expected to unleash more innovation in the network focused mainly on smart contracts.
