The Bitcoin network is poised for its biggest update in over four years, as the community moves to adopt “Taproot.” If activated later this year, the Bitcoin network is expected to become more secure, private and cheaper to use. Here’s what you need to know about this incremental update to the world’s most popular cryptocurrency.
What is Bitcoin Taproot?
Taproot is a Bitcoin soft fork that changes the way signatures are implemented on the network. It switches the network from Elliptic Curve Digital Signature Algorithm (ECDSA) to Schnorr cryptographic signatures.
That sounds complicated and technical, but what it essentially means is that a set of multiple digital signatures can be combined into one. This has several advantages. For one, it makes transactions cheaper and faster since only one master signature needs to go through. It also makes it easier for users to obfuscate their identities or the number of participants in any trade, leading to greater privacy for everyone.
Some experts also believe that the Taproot update will allow users to create smart contracts on the Bitcoin network. That could greatly enhance the trillion-dollar network’s utility over the long-run.
What happens now?
This week marks the commencement of the so-called “Speedy Trial.” It’s a three-month period where Bitcoin miners have a chance to signal support for the network upgrade. They must do this by mining a special Taproot block on the blockchain and signalling their intent to upgrade. If enough miners signal support (over 90%), the activation is implemented by November, 2021.
However, at the time of writing roughly 13% of the blocks mined did not signal Taproot activation. This means the upgrade won’t be implemented in the current period. However, it could be implemented in the next block cycle.
Several key figures in the tech and crypto community have signaled their support for the upgrade. Twitter CEO Jack Dorsey tweeted about the fork and expressed support earlier this week. Evangelist Andreas Antonopoulos claimed he would upgrade his nodes for the update and Charlie Shrem gave the developers a shout out. It seems Taproot has enough demand and traction to eventually get adopted, even if the current Speedy Trial doesn’t go through.
Final thoughts
Bitcoin’s 12 year-old network needs incremental updates to stay on the bleeding edge of digital assets. Previous updates and innovations, such as the Lightning Network, have had incredible success and helped make Bitcoin a mainstream asset.
The current update, Taproot, could make transactions faster, more efficient and more private for users across the network. Miners have three months to signal their participation, in which case the update is implemented by the end of the year. Several influencers in the community have expressed their support. Taproot highlights the community’s need for a more streamlined and capable Bitcoin network.
Track the update here: https://taproot.watch/
