Last Sunday, November 14, the bitcoin network received its latest update. That is the Taproot upgrade that has now been activated, officially at block 709,632, which will usher in major changes to the same blockchain network. It will now provide its developers with a set of additional tools and features that will improve the BTC token’s scalability, privacy, and security. The same will naturally apply to the entire network and all of its use cases. That is a big improvement for the network and its launch was set in June when over 90 percent of miners signaled that they are ready and supportive of the upgrade. A waiting period between the approval and activation was set and gave miners and operators time to fully prepare for the Taproot using the latest version of the main network code, which is Bitcoin Core 21.1.
It comes with the latest upgrade embedded inside of it. Once all miners have the latest core version, they too will be able to enforce the new network rules and allow for the same type of transaction. That is not just good news for the miners, but also anyone else who is employing the same network for any kind of development work. With that, the developers will have a bigger level of control and influence on the use of the same BTC tokens, but also further strengthen the entire network as a means of providing technical solutions that are more competitive with more advanced networks like etherium. All of this will, at the same time, boost the monetary value of these cryptocurrencies as well.
Overall, Taproot is a mixture of all manner of technical innovations. Many analysts explain it as a melting pot of elements and have a long history for the crypto network like bitcoin. It first began to gain traction back in 2018 and since then, three separate BIPs (Bitcoin Improvement Protocols) have been written on the same subject. The key element among them is the so-called Schnorr Signatures. So far, bitcoin tokens have been using a scheme based on cryptography to provide digital signatures. This is the so-called ECDSA system.
These appear when users take on a transaction using their private key so that they can approve a movement of tokens from point A to point B. With the Schnorr scheme, each transaction on the Taproot can now apply a new concept for these transactions, along with new features that come with it. These will boost the security and privacy of all transactions, but also allow for a scaling-up in the same network.
Benefits of the Upgrade
Taproot brings a range of benefits to the table for all crypto users who employ BTC for some development or financial venture. That includes not just esports players and crypto enthusiasts, but also many other regular users of this huge digital currency. First of all, Schnorr is not just faster and smaller than ECDSA, but also has the advantage of being of a linear nature. That should allow it to boost the BTC level of transaction privacy, but also allow for lightweight but still complex smart contracts.
These are contracts that include self-execution parameters and rules. Because of this, the benefits on offer will be important in a range of projects that are currently taking place across this ecosystem. For example, that involves multi-signature transactions. These are transfers of value that include more than a single group of signs that need to validate a transaction. These processes will not only be cheaper, but they will also use a lot less data bandwidth.
One of the key objectives behind Taproot has always been to develop an upgrade that will greatly improve the privacy of using the bitcoin network. Because of the fact that this network is very transparent and public, the level of privacy it provides is different from the ones that banks and other traditional financial services offer to their users. That is why a curious individual can use public bitcoin systems to track and observe any transaction ever sent inside of the network, starting from the moment he first went public and lived over a decade ago.
Taproot will not change this crucial factor of the network but will allow some of the more intricate transactions and smart contracts to remain hidden. At the same time, it will encompass the Lightning Network transitions into the main fold of the border ledger. That means they will be able to be assessed just like any other transaction on the core network.
Factor of Scalability
As many digital currency networks recently showed, the ability to scale up is one of the most essential factors behind a sudden rise to fame. That means that if a cryptocurrency gains a lot of transactions – for example, a network like Twitter suddenly decided to allow its users to hold digital wallets and send money using this digital currency – it will need to scale up and do it fast. In the case of BTC, developers cannot simply drive up the network limits without creating an issue for the bitcoin level of decentralization, so they need to look for other alternatives. Taproot and Schnorr allow for this by reducing the amount of data that is being stored on the network.
The multi-signature nature of the same process now allows for the same level of effectiveness but does not risk any of the current features and abilities. That is a win-win for the bitcoin network, but also another milestone on a roadmap to even a bigger level of user adoption. Also, it is one of the most important elements that tie all others together. While BTC has been taking a lot of flak on the account of its relatively developmental modest toolset, the recent upgrade changes that for the better in a range of ways. Of course, the bitcoin network is still not on the level of that of ethereum, but it narrows the gap. That will be a huge benefit not just now, but also in the future to come.