- Bitcoin’s Taproot upgrade has been almost three years in the works, but has reached 74% consensus among miners
- The upgrade is said to bring more privacy and flexibility in Bitcoin transactions
- What exactly is Taproot, and why is it needed?
Bitcoin’s Taproot upgrade proposal has reached 74% consensus among miners, meaning that the vast majority of are now running it. But what is Taproot and why does Bitcoin need it? Our essentials guide explains.
What is Taproot?
Taproot is a proposed Bitcoin upgrade that would allow for increased transactional privacy. It was introduced by Bitcoin developer Greg Maxwell in January 2018 and was proposed in Bitcoin Improvement Proposals (BIPs) 340, 341, 342 in January this year.
What will Taproot do?
Taproot will implement Schnorr signatures into Bitcoin. These are a cryptographic technique for signing transactions which will enable Bitcoin to conduct more flexible and private smart contracts.
Taproot will make all transactions, be they simple payments between two parties, opening or closing a Lightning Network channel, or a more complex smart contract, look the same to outside observers.
Why does Bitcoin need Taproot?
Currently, Bitcoin has multiple script types, which is why Bitcoin wallet addresses can start with different letters (e.g. ‘I’, ‘bcI’). The combination of different multisignature (multisig) scripts means that privacy-relevant information can get leaked with each transaction.
Taproot will introduce a new standard script type – P2TR – which will allow multisig transactions where all the information is obscured in the same way as with a single signature transaction.
When will Taproot be implemented?
There is no set date for the implementation of Taproot. It was merged into Bitcoin Core last month, but the implementation period can take weeks or months. However, with 74% uptake to date, it shouldn’t be long before all miners are utilizing the new scripts.
What do I have to do?
Nothing. You will not notice a difference in the way you conduct Bitcoin transactions, but you will be able to do so safe in the knowledge that those transactions are more secure than they have ever been.