Taproot is the most significant Bitcoin update since 2017.
A long-awaited update to the Bitcoin network is finally here. The new protocol, Taproot, preserves privacy in the Bitcoin blockchain, obscuring complicated transactions. It also makes them cheaper and lighter.
The update, which was completed on June 12, has been in the works for seven years. It combines complex transactions with simple transactions without overloading the blockchain.
Taproot does this by replacing the current Bitcoin signature protocol with Schnorr signatures. These are faster signatures that increase the privacy of Bitcoin transactions and facilitate the implementation of lightweight smart contracts.
This is tentatively good for Bitcoin. It will make transactions with multiple signatures, which requires multiple signatories to approve a transaction at once, cheaper and easier to perform. Making better use of Bitcoin’s finite space makes the blockchain more scalable too.
Taproot is the most significant update to Bitcoin since SegWit in 2017. SegWit fixed a number of bugs, allowed more transactions to be placed on each block, and laid the groundwork for Tier 2 payment channels like Lightning.
Today’s update signals a shift mostly behind the scenes for now. The march to this day began when Taproot was activated in June; so the network instigated a waiting period for all nodes to update to the latest version of Bitcoin Core.
But as with everything else in Bitcoin, updates are meaningless unless a community makes use of them. Now it’s up to developers to build in Taproot.