- Excitement is brewing amongst crypto lovers over the proposed Bitcoin Taproot upgrade and the immense benefits that it offers to the network.
- Since the increment of block sizes of the Bitcoin network in 2017, the Taproot upgrade is the most significant.
- It offers the benefits of privacy, improved smart contract functionality, and lower transaction fees.
- Since the last major upgrade, Bitcoin has climbed to record highs of over $60,000 and currently trades at $56,625.
The decentralization of Bitcoin has made it a herculean task for any major modification to be carried out on the network because of the sheer number of actors involved and their diverse backgrounds. However, it seems a consensus has been reached, birthing the Taproot upgrade, which will bring new benefits that will improve the functionality and value of the network.
Bitcoin’s Taproot: A long Time Coming
Perfection cannot be attained, but a series of steps can bring us closer to the goal, and this is what Bitcoin aims to achieve with the Taproot upgrade. The Taproot upgrade is designed to improve the underlying technology on which Bitcoin is built, giving it the value to compete favorably in the crypto ecosystem.
Bitcoin’s Taproot upgrade is a watershed moment because it is the first significant upgrade on the network since 2017. This has generated a ton of attention because of the way in which consensus was reached. Bitcoin’s decentralized nature makes it incredibly difficult for a consensus to be reached because of the diverse interests on the network. However, the proposed change was widely accepted by key players in the industry.
The Bitcoin Taproot upgrade utilizes the Schnorr signature scheme and the Merkelized Abstract Syntax Tree to ease the conversion of complex Bitcoin transactions. According to Lior Yaffe, CEO of Jelurida, these technological upgrades are designed to prioritize the privacy of users and “make the Lightning Network a mainstream payment platform.”
On the Flipside
- Bitcoin’s Taproot upgrade faces hitches in deployment as less than 28% voted for it.
- The Taproot upgrade will require 90% of the processed blocks to signal support.
- Despite the difficulties, a two-week window will be opened in an attempt to get miners to back the upgrade.
Changing The BTC Ecosystem One Step At A Time
The Bitcoin Taproot upgrade, if successfully implemented, has the benefits of potentially revolutionizing the ecosystem. It contains several features which contributed in no small measure to the support it has gained from key players across the industry.
The most significant change is the increase in privacy that it offers to users. This privacy feature does not affect Bitcoin addresses. Instead, it makes complex transactions indistinguishable from simple transactions. Through the use of the Schnorr signature scheme, the Bitcoin ecosystem is set to enjoy the functionalities of smart contracts. Furthermore, the Bitcoin Taproot upgrade offers lower transaction fees and will make transactions on the Lightning Network a lot cheaper.
Ultimately, these features and improvements will be geared toward improving the value of the cryptocurrency, providing an incentive for long-term holders and traders. While Ethereum aficionados are raving about the proposed upgrades coming to that network, Bitcoin has something up its sleeve that will have a positive effect on the entire network. Bitcoin currently trades at $56,625 and has a market capitalization of over $1 trillion, which could soar even higher after the Taproot upgrade.
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