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Big News Is Coming for Bitcoin, Keep Watch on November 16

CryptocurrencyOct 28, 2021 09:00AM ET
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© Reuters. Big News Is Coming for Bitcoin, Keep Watch on November 16

  • The Taproot Bitcoin update is coming on November 16, 2021.
  • Bitcoin’s blockchain will soon see many new features on its network.
  • The Bitcoin community will soon be able to enjoy an influx of benefits.

Kraken’s Director of Growth Marketing — Dan Held, tweets about potentially groundbreaking news. In particular, he tells the crypto community that a huge upgrade is coming for Bitcoin. Specifically, this upgrade, known as Taproot, will go live on November 16.

In addition, he followed up the tweet with a thoroughly informative article about Taproot. This declaration led to a flood of comments. For instance, most of the responses encouraged readers to buy the dip. Meanwhile, other responses were firm on their ‘HODL HODL HODL’ stance.

But what actually is Taproot? What does it offer to Bitcoin (BTC) and its users? Most importantly, is it truly as revolutionary as Held claims? Is this the solution for a more scalable Bitcoin network? Well, let’s take a deep dive into the project and find out for ourselves.

What Is Taproot?

Taproot is a proposed upgrade for Bitcoin. It will finally make its debut on November 16. This upgrade will introduce a whole range of new features to the Bitcoin network. To name a few, it will strengthen the core cryptography, improve privacy, and lower transaction fees.

Quick history, it was Bitcoin’s core contributor and former Blockstream CTO — Gregory Maxwell, who proposed Taproot. The idea is to expand Bitcoin’s smart contract flexibility. This is an intense upgrade. Thus, several core contributors are putting their heads together to work on the Schnorr signature proposal.

To specify, Schnorr signatures is one of three Bitcoin Improvement Proposals (BIPs) for Taproot. The other two are Tapscript and Taproot itself. Respectively, they are also known as BIPs 340, 342, and 341, together they make up BIP Taproot. With these new BIPs in place, the Bitcoin network can offer more efficiency, flexibility, and privacy.

So how do these BIPs contribute to such incredible and much-needed changes on the network? Well, Taproot will be introducing a new script type known as Pay-to-Taproot (P2TR). This acts as a new way to spend BTC. All BTC are ‘locked up’ within scrips. Here, the P2TR simply offers room for more lax rules.

Understanding the BIPs

In detail, BIP 340 will bring on Schnorr signatures onto the Bitcoin network. In addition, this BIP explains the encoding of public keys and signatures in Bitcoin. To elaborate, public keys used for Schnorr signatures take up 32 bytes, while the Schnorr signature as a whole takes 65 bytes. This is less than the space ECDSA signatures need.

So while BIP 340 decides the specifics needed to generate and encode Schnorr signatures, BIP 341 explains how the Bitcoin protocol will integrate Schnorr signatures. Accordingly, the Bitcoin script has to be updated to evaluate these signatures.

Moreover, Taproot will also integrate Merkelized Alternative Script Trees (MAST). With this, users on the blockchain can lock outputs to multiple scripts. The unique benefit here is that if any data in the Merkle tree is revealed, then the Merkle root can verify that the data came from the Merkle tree.

Lastly, the final piece of the puzzle is BIP 342 — Tapscript. In order to implement transactions for P2TR, this proposal updates and adds several opcodes. With these new scripts in place, it is made possible to verify Schnorr signatures and Taproot spends. Above all, Tapscript is built to increase flexibility for future P2TR spending. In turn, this will allow unforeseen future upgrades.

The Key Benefits

Certainly, Taproot will offer Bitcoin users a ton of benefits. It is after all an upgrade that has been long-awaited. Therefore, its debut will bring with it multiple benefits. In detail, saving space is a huge benefit. With P2TR locking BTC directly to public keys instead of the hash of the public key, it offers more free space on the blockchain.

Next on the list of perks is privacy. With the presence of key aggregations and Schnorr signatures, multisig contracts look similar to single contracts. Hence, all Taproot users will enjoy more privacy.

Likewise, with MAST, Taproot lets BTC lock onto many scripts at the same time. Up next is higher security upgrades. With Schnorr signatures on the job, security is considerably much stronger. All in all, these new benefits will certainly increase the capacity of the blockchain. Indeed, users should be very excited for Taproot’s debut.

In conclusion, Taproot’s Bitcoin update will likely be revolutionary. Analysts may have a field trip with this upgrade on how it will affect the price of Bitcoin. No doubt, most analysts are eager to see Bitcoin soar beyond $100,000 by the end of this year. Perhaps Taproot will provide that pump? We’ll just have to wait for November 16 and see for ourselves.

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Big News Is Coming for Bitcoin, Keep Watch on November 16
 

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Omar Souaid
Omar Souaid Oct 28, 2021 9:08AM ET
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HODL
 
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