Are you familiar with the concept of cryptocurrency? Yes? Then, you may know the importance of the security, scalability, and confidentiality of this digital payment system. However, the lack of these three features raised concerns for many.
Even it remains the same for BTC or Bitcoin, which is touted as the most prominent cryptocurrency in the world. However, the introduction of Taproot has eliminated these concerns.
Taproot was introduced on 14th November 2021 as an upgrade to the BTC (Bitcoin) network. This upgrade has relieved many, as most people were expecting for its implementation since the evolution of SegWit.
The main goal of Taproot is to modify the operation of BTC scripts to scale up security, privacy, and scalability. However, many other improvements can be made possible by integrating Taproot and Schnorr signatures.
Taproot also aims to take the network’s ability for smart contract processing to a new level. All these benefits of Taproot have made it the most important BTC upgrade so far.
What is the Taproot Upgrade about?
You already know Taproot is the most distinctive upgrade so far (the last major upgrade was SegWit in 2017). However, it is also significant to be aware of the elements of the Taproot upgrade.
The Taproot upgrade comes with three unique BIP or Bitcoin Improvement Proposals. It includes Tapscript, Taproot, and Schnorr signatures (it is a brand new digital signature concept). When it comes to the advantages for BTC users, Taproot has not disappointed at all. This cutting-edge upgrade alleviates transaction fees and boosts transaction confidentiality.
In addition, the Taproot upgrade also helps BTC to perform complex transactions and increase BTC’s capability or applications to give strong competition to Ethereum (in terms of supporting NFT & DeFi and smart contract potentiality on the network). Note that NFT stands for non-fungible token and DeFi stands for Decentralized Finance.
The proposal for the Taproot upgrade was first presented by Greg Maxwell, the BTC Core developer, in January 2018. Next, Taproot was integrated with the BTC Core library in October 2020 when Pieter Wuille generated a pull request. Note that a pull request is a way of suggesting contributions to an open development project.
However, node operators needed to make use of the new consensus rules of Taproot to ensure its complete deployment. Finally, the Taproot upgrade was officially launched on 14 November 2021 after 90% of miners came in support of it. The upgrade was activated on block 709,632.
How will Taproot make BTC better?
You already know how the Taproot upgrade came as a boon to BTC. The key improvements of Taproot contribute to the privacy and applications of Bitcoin. Other major improvements that Taproot comes with include:
Taproot has made it possible for BTC to complete more transactions per blocks, which means the TPS (Transactions Per Second) rate has improved.
The Taproot upgrade lowers the volume of data that can be transferred as well as stored on the BTC. As a result, network scalability improved.
Taproot has also alleviated the transaction fees of Bitcoin or BTC in the network.
One of the significant benefits of Taproot is that it tightens the security of signatures in the BTC network. That means signatures are no longer malleable, which denotes that the signature of a transaction on the Bitcoin network cannot be changed even before the confirmation.
Note that signature malleability enables attackers to modify the signature of a transaction and make it as if it never happened. It causes a double-spending problem for the BTC network, which can put the morality of the distributed ledger at stake. All these points show the importance of the Taproot upgrade for Bitcoin.
Is there anything else?
The deployment of Taproot is projected to take the functionality of the Bitcoin network to a new level to simplify BTC transactions and make them fast and trustworthy.
Before Taproot’s introduction, the BTC protocol was on Layer 1 developments whereas Ethereum had reached Layer 2 as well as DApps.
However, the Taproot upgrade has made BTC pave its way to leverage smart contracts and increase its applications to serve the DeFi and NFT markets in the future.
Since the Taproot upgrade has reduced the fees of BTC transactions, the network has become more efficient and user-friendly. Moreover, the BTC network can now incentivize more and more transactions than before.
The taproot upgrade enables BTC users to ensure their privacy for every transaction. And that is how BTC has become a highly competitive option in the market.
Some more benefits of the Taproot upgrade for the BTC network are as follows:
- Taproot integrates all kinds of BTC transaction outputs into a single Taproot output. As a result, the upgrade boosts the privacy of transactions by making them indistinguishable.
- Taproot leverages the power of transaction structuring technique and cutting-edge signature algorithm to take the data efficiency to a new height.
- The Taproot upgrade improves BTC programmability.
Moreover, the upgrade has introduced a new signature scheme to improve the BTC network’s security. Thus, it becomes a dual-signature blockchain.
Although Taproot comes with a couple of pitfalls, they seem to be negligible when compared with its benefits. Note that Taproot drawbacks are only perceivable if network participants partially leverage the upgrade. The 54% of BTC nodes harness the power of Taproot, but the number has increased recently.
There is no doubt how the Taproot upgrade has proved immensely beneficial to the BTC network. The combination of Bitcoin and Schnorr signatures has taken the security, scalability, privacy, and other features to a new level.
Moreover, these improvements on BTC can also be expected to raise the curiosity and interest of people about the Lightning Network. The upgrade also contributes to making multi-signature a well-accepted industry standard.
Irrespective of your level of usage of the Bitcoin network, the upgrades would change your experience with the BTC network in terms of security, privacy, and efficiency.
The Taproot upgrade has scaled up the BTC network and made transaction processing more efficient. As a result, Bitcoin is on its way to becoming a best-in-class platform for transactions.