Bitcoin Is Getting Much-Needed 'Taproot' Upgrade This Weekend: What Will Change?

Bitcoin is getting an upgrade! With "Taproot," Bitcoin transactions are set to become cheaper, more secure, and more efficient over the weekend.

All technology is built on the premise of maximised functionality which is achieved through regular updates over years. Taproot intends to do exactly that. First coined by Bitcoin Core contributor Gregory Maxwell, Taproot will essentially make contracts that facilitate the exchange of Bitcoin more securely.

Reuters

As is true for all bank transactions, the adoption of Taproot will standardise how each payment appears on the blockchain regardless of the nature of the payment, multiple signatories, and the network used to conduct the payment.

On Taproot addresses, Bitcoin users will also save a lot on transaction fees. The size of each transaction will be considerably compressed, allowing the scope of more complex operations while making Bitcoin exchanges.

Bitcoin's smart contracts are coming!

For starters, the Taproot mechanism will improve smart contract functionality while expanding its scale. To understand Taproot, we must understand Bitcoin. Each Bitcoin is enmeshed in code that depicts each transaction on the blockchain. This code decides how the Bitcoins may be spent later on. Of course, a signature is required for each transaction to ascertain the ownership of every Bitcoin.

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Smart contracts essentially give Bitcoin owners the freedom to create personalised transactions - with an amalgamation of various security measures (like "timelocks" that allow Bitcoins to be spent after a certain period).

Reuters

With Taproot, a verification caveat that would potentially reveal different conditions for the transfer of Bitcoin funds would be eliminated. Nobody would be able to see the wallet used, and a lot of data dependence would be eliminated.

Why are Taproots more secure for Bitcoins?

A "MAST" (Merkelized Abstract Syntax Tree) is one of the components of Taproot that hashes different conditions for each transaction individually. To verify each condition, only data about that "root" is revealed, protecting the privacy of the user and the transaction itself.

With "Schnorr," a key characteristic of Taproot, collective signatures would replace invidualised signatures - offering faster verification and levels of correctness while keeping the identities of the signatories safe.

Combine these two, add more layers of sophistication and voila! Taproot for Bitcoin is ready to go! With help from MAST, Taproot would require a single condition to be agreed on by all people involved in a transaction, requiring them to sign off on the transaction together. This would bring in more accountability and safety for especially big transactions.

Reuters

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All collective transactions, or as it is known - "cooperative close" would then show group transactions as a single one without divulging any more information. "A threshold public key" would be the sum of each participant's individual keys, resulting in a "threshold signature" - a combined signature of all parties that allows the transfer of funds.

Essentially, anything that happens using the threshold key and signature will appear as a regular transaction without any apparent markers of collaboration. Taproot mechanism in Bitcoins will empower its users with more customisation, quicker signatures, and simpler conditions for each transaction to take place. The best part is perhaps that the script of each transaction would no longer be revealed, protecting the privacy of each transaction.

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This may be especially helpful in regimes where cryptocurrencies like Bitcoin are facing increasing scrutiny from government and state authorities. Taproot is the upgrade cryptocurrencies need to keep up with its own massive adoption at the moment. Do you trade in Bitcoins? Do you think Taproot will benefit you? Share your thoughts with us in the comments below.

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For more from the world of cryptocurrency and the latest in science and technology, keep reading Indiatimes.com.

PS: The Taproot upgrade for Bitcoin is happening over the weekend. Watch out and as is true for all things crypto, exercise caution.

Citation

van Wirdum, A. (2021, March 1). Taproot Is Coming: What It Is, and How It Will Benefit Bitcoin. Bitcoin Magazine: Bitcoin News, Articles, Charts, and Guides.

Why You Should Care About ¡°Taproot¡±, The Next Major Bitcoin Upgrade. (2021). ZeroHedge.