December 4, 2021

Taproot update activated on bitcoin network

The first update of the Bitcoin network in the last four years happened today, November 14, at 8:15 Moscow time on the block 709632.With the Taproot update, transactions will become more confidential and efficient. In addition, so-called "programmable scripts" will appear, similar to the smart contracts used in Ethereum. Analysts agree that the Taproot soft fork could support further Bitcoin gains.

Why should bitcoin upgrade?

Bitcoin is the first and oldest cryptocurrency onwhich is equal to the entire cryptocurrency industry. The bitcoin blockchain has long technically lagged behind the more innovative altcoin networks in terms of scalability, speed, usability, and use of smart contracts.

Because of this, the practical application of the firstcryptocurrencies are often inferior to new tokens, and this hinders its spread and slows down the price growth. The need to move to a multi-tier blockchain, optimize the Lightning Network and smart contract system, and increase scalability and privacy is long overdue. Therefore, in 2018, Bitcoin Core developer, ex-CTO of Blockstream Gregory Maxwell, described the Taproot upgrade scheme. His proposal to improve the bitcoin protocol is recorded under the number BIP-341.

What has changed with Taproot on the Bitcoin network?

  • increased transaction confidentiality
  • the size of the commission for conducting transactions has decreased due to a decrease in the amount of service data in the block
  • blockchain capabilities have expanded through the use of smart contracts (thanks to the implementation of the Merkelized Abstract Syntax Trees, MAST technology)
  • the cost of smart contracts has decreased and their creation has been simplified
  • increased privacy, efficiency and decreased costs when using Lightning Network channels that provide high-speed transactions

How did the crypto community react?

Many members of the bitcoin community fearedthat activating Taproot may cause the circuit to split. But no major mining pool wanted to run alternative software and reject blocks containing Taproot format transactions. Everything went smoothly. Analysts suggest that the Taproot update is already “embedded” in the price of bitcoin and affects it. Therefore, everyone hopes that after activating Taproot, Bitcoin will delight its fans, overcome the $ 70,000 level and rush to new heights.

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