- Bitcoin is expecting its most significant upgrade in four years after over 90% of miners have signaled support for the softfork.
- The Taproot update will enable Bitcoin to be more cost-effective and allow for additional privacy.
- Smart contracts would be cheaper and smaller, a key improvement as part of the upgrade.
The most anticipated change to the Bitcoin network since the Segwit softfork in 2017 has finally received a green light from the cryptocurrency community.
Bitcoin network sees first upgrade in four years
The first upgrade to the Bitcoin network in four years – Taproot – has just been approved by miners worldwide.
The change to the network was first proposed by Bitcoin Core contributor Gregory Maxwell in 2018, which would decrease transaction costs on the network, and enable multi-signature (multisig) transactions to be cheaper and more efficient.
Most miners have signaled for the activation process, with over 96.48% in favor of the upgrade, crossing the 90% threshold needed for the update.
Currently, any person can detect transactions on the Bitcoin network using complex features like timelock or multisig.
The Taproot upgrade will take effect in November, with greater transaction privacy and efficiency expected from a new signature scheme called Schnorr signatures. The update would enable smart contracts to be cheaper and smaller, unlocking their true potential.
Smart contracts can be created on Bitcoin’s core protocol layer and on the Lightning Network – a payment platform build on Bitcoin to enable instant transactions.
The rise of the decentralized finance industry has proven smart contracts to be the primary driver of innovation on the Ethereum network. As an increase of programmers begin to build smart contracts on the Bitcoin network, the leading cryptocurrency could become more of a player in the DeFi industry.
Before the update is activated later this year, a great deal of testing would reduce the chances of running into issues during the upgrade. Jason Deane, an analyst at Quantum Economics, explained:
“Upgrades allow the – extremely remote – possibility of a bug entering the system, which would destroy confidence in the whole cryptocurrency system, effectively wiping it out – a ‘self-inflicted wound’ if you like.”
Deane added that these upgrade processes are carefully tested, vetted multiple times and through long periods of time prior to being deployed.
Unlike the last upgrade on the Bitcoin network in 2017, also known as the “last civil war,” Taproot has gained near universal support as the new features are essential improvements to the code.
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