Bitcoin’s Taproot Upgrade Gets Deployed
On Sunday 14 November, Bitcoin’s highly anticipated Taproot upgrade went live.
Activated at block 709,632, Taproot added new features to improve security, privacy, and potential for Bitcoin.
Taproot is the first upgrade to land on the Bitcoin blockchain since it hard forked back in 2017 where Bitcoin Cash was created.
Back in June 2021, 90% of miners signaled that they’re happy to incorporate Taproot into the Bitcoin Core code, beginning a chain reaction that would mark 14 November 2021 as a historic day in Bitcoin’s timeline.
Now, miners can upgrade their clients to Bitcoin Core 2.21 to allow Taproot transactions and features to become enabled.
Can I Use Taproot Now?
If you were wondering if you need to change the way you make transactions, we’ve got your back.
For those of you that want to carry on using Bitcoin the exact same way you did last week, you can.
Nothing has changed to the way you make transactions.
Taproot simply adds in a bunch of new advanced features, that you’ll likely only be able to take advantage of from a wallet such as Exodus.
However, it will be some time before you’ll be able to use these new features.
Wallet developers need to update wallets by writing new code in order to give you access to the new features introduced by Taproot.
For example, if you want to make your Lighting Network channel transactions look like regular transactions, you’ll have to wait a bit.
It took 2 years for SegWit to be used in more than 50% of daily transactions, so we are expecting Taproot to be on a similar timescale.
When your wallet finally supports Taproot’s features, you’ll have to update it to the latest version.
But again, this could be several years down the line, meaning that you may have forgotten all about Taproot by the time you get access to its features.
What is Taproot?
Taproot is 3 upgrades rolled into a single update to the Bitcoin Core codebase.
These 3 upgrades have been in the works for quite some time, and a considerable amount of work has been done to bring them to fruition.
Taproot was first suggested back in 2018 by Greg Maxwell, and eventually all 3 Bitcoin Improvement Proposals (BIPs) were merged into Bitcoin Core back in October 2020.
Then, a ton of testing took place and slowly more miners gave it the green light, eventually getting to a point where 90% of all miners agreed with the upgrade.
Taproot is made up from BIP-340, BIP-341, and BIP-342.
BIP-340 reduces the number of exposed signatures for multi-sig transactions, which saves block space and increases privacy.
BIP-341 changes the way smart contracts work on Bitcoin, only revealing the conditions that caused the contract to be processed, rather than all the failed conditions too.
This increases smart contract security as it exposes less conditions to potential hackers.
Finally, BIP-342 introduces an upgraded scripting language and removes the 10,000-byte limit on smart contracts.
This gives Bitcoin smart contracts more freedom and flexibility, meaning that we should see more creativity in smart contracts going forwards.
Taproot is Finally Live!
Many people are excited about the prospect of Taproot and the new features that it brings.
But, for the time being nothing will change in the daily life of Bitcoin.
It will be several years before Taproot becomes adopted by more than 50% of all daily transactions.
Any price action from the Taproot upgrade is already factored in, so we are not expecting any massive price spikes on the back of this upgrade.
We may see price action when large wallets release updates to include Taproot features, but that is still a long way off. So, while Taproot is live on the Bitcoin network, there’s still an awfully long wait to go before the average user can begin using it!
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Tokoni Uti
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