- The much-awaited Bitcoin upgrade “Taproot” is presently receiving support from more than 95% of miners.
- For the Taproot update to be locked in, it needs support from more than 90% of miners.
- Taproot will improve privacy, expand smart contract flexibility, reduce transaction fees, and improve speed.
Taproot, the much-anticipated Bitcoin update, is currently in its third signaling round. So far in the current period, more than 97% of miners have signaled support for this upgrade. If this ratio is held, Taproot will be locked in forever within two weeks from now.
The deployment method for Taproot, after long discussions, was selected as a “Speedy Trial.” The Speedy Trial was integrated into Bitcoin Core last month, and it allots a three-month activation period during which at least 90% of miners should signal support for the update. This 90% threshold should be reached before August 11.
According to live data by taproot.watch, at press time, a total of 627 blocks have signaled in the current signaling round. Of these blocks, 614 signaled support while a negligible 13 blocks did not signal support. As of now, the ratio is 97.93%, which is the percentage of Taproot supporters. If this ratio is kept, with consensus, Taproot will be locked in.
What is Taproot and Why is it Important?
Originally introduced by Gregory Maxwell, Bitcoin Core contributor and former Chief Technology Officer at Blockstream, Taproot is a Bitcoin protocol upgrade aimed at increasing Bitcoin’s smart contract capabilities and expanding its privacy. In technical terms, Taproot joins the Schnorr signature with MAST solution and a modern scripting language called Tapscript.
The Schnorr signature scheme is precious for Bitcoin because it facilitates signature aggregation, enabling various signatures in an individual transaction to be merged into one. MAST, on the other hand, utilizes Merkle trees to solve privacy and size issues associated with complex smart contracts.
By merging the Schnorr signature with MAST, the Taproot update delivers a complex smart contract similar to a conventional Bitcoin transaction. Thus, improving privacy by preventing the different types of transactions from being distinguished.
Aside from privacy benefits, here are some more advantages that come along with this update:
- Fewer fees – Thanks to Taproot, the transaction data size for making complex Bitcoin transactions will greatly diminish. Simultaneously, the transaction fee costs for employing more complex smart contracts or Bitcoin wallet features will reduce.
- Smart contract flexibility – The update will enable users and developers to assign more complex conditions and requirements for a transaction.
- Security benefits – With Taproot, the signatures will no longer be malleable, meaning that it would be impossible to modify the signature of a transaction before it is verified.
- Faster transactions – Taproot addresses the data size problem. Therefore, as size reduces, the transactions’ processing speed increases.