Taproot upgrade bitcoin

A soft fork on the Bitcoin network will take place in a few days, and it will introduce Taproot, the first upgrade in four years.

The Taproot upgrade is expected to take place on November 14th after achieving a 90% approval consensus from Bitcoin miners.

It is the first upgrade for the network since November 2017. Segregated Witness (SegWit) was deployed, and the network forked to create Bitcoin Cash.

The highly anticipated upgrade will improve the Bitcoin network’s privacy, transaction efficiency and unlock smart contract capabilities.

Improving Bitcoin

Taproot was greenlit or “locked-in” in June. At the time, founder and managing partner of Bitcoin-focused venture firm Stillmark, Alyse Killeen, said: “Taproot matters because it opens a breadth of opportunity for entrepreneurs interested in expanding bitcoin’s utility,”

Under the hood, the upgrade consists of three Bitcoin Improvement Proposals (BIPs):

  • BIP-340: Introduces a better signature type than the original Elliptic Curve Digital Signature Algorithm (ECDSA) used by Satoshi. The new Schnorr Signature algorithm will allow users to aggregate multiple signatures into one, improving security.
  • BIP-341: Changes the Segwit spending rules with a Pay-to-Taproot (P2TR) mechanism, making transactions more private. The new signatures will not mean greater anonymity for individual Bitcoin addresses on the public blockchain. However, they will render simple transactions indistinguishable from more sophisticated ones involving multiple signatures.
  • BIP-342: Makes the first two parts operate inside scripted systems, increasing efficiency and lowering transacting costs.

On the other hand, the multiple signature part will enable more complex transactions like those used in smart contracts. Developers are already working on smart contracts for the Lightning Network, Bitcoin’s layer 2 scaling solution.


$BTC Price Outlook

Finally, the crypto market has hit an all-time high capitalization today, tapping USD 3 trillion. Therefore, Bitcoin itself is up 6.4% on the day topping $66,273 at the time of writing this article with a marketcap of USD 1.2 trillion.

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Above all, find out more about the blockchain and crypto space on the Altcoin Buzz YouTube channel.


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