Bitcoin Is Not Dead
Crypto is undoubtedly the most innovative space of current days. Every month, week, and even day something new is brought to the market and all over the world coders are at work to build new products and features. In past blog posts we have covered numerous projects that have interesting value propositions and are hard at work to change the crypto landscape. In today’s post, however, we go back to where it all started; Bitcoin.
Many people conceive Bitcoin as a stagnant and old project, but that is far from the truth. Bitcoins’ code is also innovating and changing. Perhaps not as fast and radically as that of other crypto projects, but it is still innovating.
Back in June consensus was achieved by the majority of the Bitcoin miners for a soft fork. This means that the network is upgraded without the need of making a new blockchain. A soft fork modifies the original blockchain. On November 14th, the changes went live on the Bitcoin network and it was a huge success. Not only were there no problems, it also showed that Bitcoin is still developing and improving.
Without going too much into technical details we will explain what exactly the soft fork brought to the Bitcoin network and what we can expect in the future.
What is Taproot?
The soft fork is called “Taproot” and was first introduced to the community back in 2018 by Bitcoin Core contributor and former Blockstream CTO Gregory Maxwell. The main focus of the soft fork is to improve on-chain privacy and network efficiency by expanding Bitcoin’s smart contract flexibility. The Taproot upgrade introduced three key aspects to the Bitcoin network: Schorr signatures, MAST, and Tapscript. You can find a more detailed and technical explanation here. In June of this year 90% of the Bitcoin miners approved the network upgrade. Taproot was activated on the 14th of November at block 706,632.
Improved on-chain privacy
The Schorr signatures combined with MAST improve on-chain privacy as complex transactions are now indistinguishable from normal transactions. The complex transactions are lightweight smart contract transactions, like multi-signature transactions and Lightning network transactions. Before Taproot you could easily distinguish these transactions from regular Bitcoin transfers by using a Bitcoin blockchain explorer. This endangers users’ privacy as you could digest important information from this data. This no longer happens with Taproot as Schorr, Mast, and Taproot hide these conditions from the public.
Additionally, thanks to Schorr signatures and Tapscripts there is less data to be processed for transactions to be submitted on the blockchain. This leads to higher efficiency and more transactions per block. This ultimately improves the transactions per second of the Bitcoin blockchain and it reduces the gas fee per transaction.
Since the passed proposal back in June, 53% of the Bitcoin nodes have implemented the Taproot upgrade.
The Taproot soft fork combined the capabilities of Schorr, Mast, and Tapscript to allow for innovative, transactional capabilities. The network update improved on-chain user privacy and increased scalability. The event showed that Bitcoin is still innovating. The network upgrade opens the doors to more use cases which developers can now build.
Even though Bitcoin as a blockchain network has its issues, coders are still at work improving the chain. The Taproot upgrade opens the doors for developers to come up with new use cases and Bitcoin-specific tools. We are excited to see how Bitcoin develops over the coming years.