Taproot, the most anticipated and important Bitcoin update in the last 4 years, has been officially activated on the Bitcoin mainnet.
The Taproot update, which enriches the Bitcoin protocol with the implementation of 3 new Improvement Proposals (BIP ) to the network, it is finally active on the mainnet. The successful implementation of Taproot in Bitcoin took place in block #709.632, mined by F2Pool miners in the early hours of yesterday. Taproot was activated on Bitcoin to increase its privacy, security and scalability, as well as its ability to create and deploy smart contracts complex.
With the activation of Taproot, which was implemented in Bitcoin as a soft fork or a soft fork, miners can begin validating the rules of this update. Therefore, Taproot transactions began to be transmitted to the network since its activation yesterday and to be included in Bitcoin starting with the next block, #709.633.
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Taproot, the most promising of Bitcoin
Taproot introduces the BIP-340, BIP-341 and BIP-342 to Bitcoin to optimize the programmability of the network, making Bitcoin much more scalable, private and secure and with greater capacity to implement complex smart contracts within its system. Although these improvements do not make Bitcoin the leading network for building and developing decentralized protocols, such as applications or DApps of the ecosystem DeFi, they will allow us to develop new functionalities within the network and expand its potential in this ecosystem, in order to facilitate the entry of many more people into the crypto world and bring the full potential of the cryptocurrency to the masses.
The block that activated Taproot processed 2.043 Bitcoin transactions, worth more than $2.400 billion. In total, 38.055,5 BTC were transacted through block #709.632.
Expanding the potential of Bitcoin
Taproot is an improvement that was introduced by the developer Gregory Maxwell in 2018, and is considered the most important network update seen in the last 4 years, after followed. With this update, Bitcoin will not only improve its privacy, security and scalability, but will include functionalities to optimize its script language, allowing the creation of more complex tools and functions to fully expand and improve its protocol.
Optimizing privacy and security
Regarding the privacy and security of transactions, Taproot includes the Schnorr firms and technology MAST within the Bitcoin protocol. The BIP-340 introduces 64-byte Schnorr signatures over the secp256k1 elliptic curve, improving the original elliptic curve digital signature algorithm (ECDSA), which was introduced by the creator of Bitcoin, Satoshi Nakamoto, to the protocol in its beginnings.
Bitcoin analyst and investor “Mr Gordon” explained via Twitter that one of the biggest advantages of Schnorr signatures is allowing the digital signatures of several people to be combined into a single Bitcoin transaction, creating a private key with a added benefit: signatures will no longer be malleable and will therefore make Bitcoin a more private and secure network. What this means is that more complex, multi-signature transactions will be completely indistinguishable from simpler ones within the network.
BIP-341 is also designed to optimize the privacy of Bitcoin transactions, thanks to new spending rules that combine with Schnorr signatures to make transactions much more private.
Efficiency and scalability
The BIP-342 will help make BTC transactions cheaper and more accessible. In addition, the combination of Taproot improvements with Schnorr signatures reduces the size of transactions, making the demand for storage space on the chain lower, favoring the efficiency and scalability of the network.
Unlocking the potential of smart contracts
Taproot will help unlock the potential of smart contracts, facilitating the implementation of more complex functions on the network, allowing it to expand its usefulness and that of its cryptocurrency. Through complex smart contracts, Bitcoin developers will be able to build new applications and functionalities on the BTC blockchain, which facilitate the entry of billions of people around the world into the crypto ecosystem, without the need for intermediaries.
The development of new functionalities in Bitcoin will grow its potential within the so-called decentralized finance, making Bitcoin an increasingly important player within this financial ecosystem in full growth and development. To date, the total value deposited in DeFi protocols amounts to more than 269.000 million.
Ready for the update
The main wallet of Bitcoin, such as Samourai, Sparrow and Muun are already prepared for Taproot and implementing support for this update. Even the creators of the hardware wallet Trezor reported that they will soon add support for Taproot and that they are eager to see the new changes and improvements that this update will bring to Bitcoin.
Although Taproot has the support of almost the entire Bitcoin crypto community, users, miners and developers, some such as developer Nikita Zhavoronkov have expressed concern before the new update. For Zhavoronkov, Taproot is not as exceptional as most consider and the developer even indicates that it is possible that the update could affect user privacy instead of strengthening it.
On the other hand, Bitcoin miners blocked the Taproot update in the middle of the year, its implementation did not occur until this month to give developers and clients time to carry out the necessary tests to detect any bugs or errors that could affect Bitcoin. In fact, last week, the customer Lightning Network, Lightning Network Daemon (LND) fixed a bug in its Neutrino implementation, which prevented nodes using this implementation from being able to process Taproot transactions. The update that patches the error detected in the LND client is now available available on GitHub.
Taproot and the price of Bitcoin
The crypto community hopes that the success of this update, and the improvements that are being added to the network, will lead BTC to star in a new bullish cycle, which can raise its value to new all-time highs. Several leaders of the Bitcoin crypto community do not rule out the possibility of seeing a 6-figure bitcoin later this year.
At press time, Bitcoin is trading at a value of $65.800 per unit, while its market capitalization amounts to 1,2 trillion dollars.
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