In November 2021, the Bitcoin blockchain is to update Taproot, and this will be the most ambitious update of the network since SegWit 2017. What changes will this long-awaited upgrade bring?
Taproot — the event anxiously awaited by the crypto community
The Taproot update, scheduled for the end of autumn , is a soft fork that will improve Bitcoin’s privacy features. How is it possible? Every time you make a transaction on the blockchain, your coins are connected to the script. A few lines of code “tell” the blockchain what you (the user) want to do with the transaction.
The most common form of this is a signature, which essentially tells the blockchain that your private key can spend coins. More complex lines of code may include aspects such as smart contracts or time frames (waiting periods). After the transactions are completed, they are added to the block chain, including the scripts used (lines of code). Sounds good, right?
The problem is that the Bitcoin blockchain has some data problems. More information about the transaction means more data, which, in turn, leads to network congestion. The more the network is loaded, the higher the fee for it. The Taproot update will give people the ability to combine signatures into one large public key. These related signatures will be combined into a single signature using the Schnorr protocol (named after Klaus Schnorr).
This update will have the following effects:
- Privacy will be improved as the data of multiple transactions are combined into one large signature;
- The amount of data is reduced as several transactions are united.
- The transaction fee will be lower because less data is used, which means that more transactions are placed in the block.
In addition, Taproot will also add additional smart contract features (yes, Bitcoin will have smart contracts). Even if you are not interested in the methodology behind this, most people like the sound of messages about lower transaction costs. The idea was proposed by Gregory Maxwell, a developer of Bitcoin Core.
Bitcoin Update: how is it initiated?
Taproot will be the biggest update since SegWit in 2017. Protocol updates are few and widely discussed due to the decentralized nature of Bitcoin. Whenever a Bitcoin developer wants to propose an idea, he must do so through the official Bitcoin Improvement Proposal (BIP). Then the BIP must go through three stages, namely: the project stage, the proposal stage and the final stage. At this third and final stage, Bitcoin developers must reach a consensus, which means that 90% of them must agree with the proposal.
It is impossible to agree with such a proposal by simply writing “yes”. In fact, developers need to signal their consent in the block chain itself within two weeks.
As for Taproot, the first proposal did not have 90% consistency, and he had to go back to the re-development stage. Two weeks later, a new proposal was drawn up, which again was rejected. Only on June 12, 90% approval was achieved. A consensus was reached, and Taproot was fixed as a new update of the Bitcoin network. The actual implementation will take place in November of this year.