Home News Bitcoin’s long-awaited Taproot update has been activated

Bitcoin’s long-awaited Taproot update has been activated

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Bitcoin’s long-awaited Taproot update has been activated in the blockchain, designed to increase the privacy, efficiency and scalability of the network. On November 14, at 5:15 UTC (00:15 EST), a soft fork occurred on block 709,632, mined by the F2Pool mining pool.

Thus, Taproot includes several important technical improvements, the main of which are: the implementation of Schnorr digital signature algorithm; and the Merkelized Alternative Script Tree (MAST) concept.

Blockstream co-founder Gregory Maxwell designed Taproot back in 2018. Since then, Pieter Wuille, Tim Ruffing, and other developers have joined the work on Bitcoin Improvement Proposals (BIPs), which became part of the update. In June 2021, 98% of miners supported the activation of Taproot. Which indicates its importance to the community. Later in September, the Bitcoin Core client (v 22.0) was released, implementing update support.

The Schnorr digital signature algorithm

In addition, MAST will increase the efficiency of processing data arrays. The design assumes the generation of separate hashes for each condition of spending coins; followed by their inclusion in the Merkle tree. In the context of Taproot, this concept also includes the presence of a condition that allows all participants to work together

Until recently, the Bitcoin blockchain used exclusively digital signatures based on the Elliptic Curve Digital Signature Algorithm (ECDSA) cryptographic scheme.

The implementation of the Schnorr scheme in the protocol will allow aggregating several signatures for one transaction into a single one due to the linear mathematics embedded in it. For example, private Lightning Network transactions that are easily identifiable on the network can now look like standard transactions.

Reducing network fees

Moreover, the soft fork will potentially reduce network fees. As multi-signature transactions will cost less due to the use of fewer data. It will also give developers an expanded set of tools to create new solutions.

At the time of writing, only slightly more than half of the nodes (53.98%) in the Bitcoin network supported the update. The rest use outdated software and therefore do not have access to new features. In addition, the impact of the soft fork on the quotes of the first cryptocurrency turned out to be minimal. According to CoinGecko, the asset is trading near $66 100, during the day its price increased by 2.5%.

Despite the importance of Taproot, not all community members believe that the update will benefit Bitcoin (BTC). Some believe that the update poses a potential privacy threat.

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