Bitcoin’s ‘Taproot’ Upgrade Is Live As Price Goes Up
Bitcoin’s long awaited and most significant network update since 2017, Taproot, was activated this Saturday. Taproot is a soft fork to the Bitcoin network and betters privacy and scripting capabilities. With its activation, the update also enables a Merkelized Abstract Tree (MAST), which makes smart contracts more efficient and private by only revealing the relevant parts of the contract when spending. It can also improve privacy of the Lightning Network by making channels look like regular bitcoin transactions, if the Lightning implementations choose to adopt Taproot.
Optimisation: Key and Signature Aggregation allows for the aggregation of public keys and sigs. Example: If an exchange sends 100 transactions to 100 people, now they can compress all 100 public keys into one key and all 100 signatures into one signature.
— Bitcoin LightningNetwork+ News (@BTC_LN) November 13, 2021
The 2017 Segregated Witness, or “SegWit” update, was the first attempt to fix Bitcoin’s perceived scaling concerns by resolving transaction malleability.
Taproot builds on this and focuses on Optimisation, Privacy and Smart Contracts. With for example the Key and Signature Aggregation that the update offers, public keys and sigs can now be aggregated. In other words. If a crypto exchange sends 100 transactions to 100 people, they can compress all 100 public keys into one key and all signatures into just one.
Taproot was introduced earlier in the year and got started once Bitcoin mining nodes reached a 90% consensus in mid-June. The past months were used to extensively test the upgrade to prevent any issues from occurring once it would be fully rolled out.
While it does not immediately change the network, its capabilities and privacy, Taproot provides a solid foundation for the Bitcoin network to grow in the coming years.
Bitcoin’s SegWit implementation in 2017 kicked off a huge rally when in a few months’ time Bitcoin’s price went from $4,000 to almost $20,000. Today at time of writing, Bitcoin is already gaining momentum perhaps looking for a new high this week. The top cryptocurrency is trading hands at $65,970.40 according to CoinMarketCap data.
The Taproot upgrade for Bitcoin has officially activated.
Congratulations and thank you to every developer, miner, and Bitcoiner who made this happen.
— Pomp (@APompliano) November 14, 2021
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Author: Peter Siu