Bitcoin’s Taproot update is just a few days away: what does it consist of?

Use cases in the real world are one of the main adoption drivers for any crypto ecosystem: this obviously applies to Bitcoin (BTC) as well. In the coming days, the Bitcoin protocol will undergo a soft fork necessary to introduce the Taproot update, which aims to improve the network’s privacy, efficiency and smart contract capabilities.

Taproot is the first major Bitcoin update since August 2017, which saw the introduction of Segregated Witness (SegWit) and led to the launch of the Lightning Network. The previous fork was primarily aimed at increasing the malleability of transactions and the scalability of the Bitcoin network, while the Taproot update is aimed at increasing the efficiency and privacy of operations, as well as supporting complex smart contracts.

The launch of Taproot was confirmed after reaching a consensus of 90% among Bitcoin miners. In June 2021, it was BTC developer Hampus Sjöberg who announced the news:

WE HAVE LOCK IN! Bitcoin Taproot

Video by: @TheGuySwann!https://t.co/rCUp5VNCBX pic.twitter.com/YFLMTenWW0

Hampus Sjöberg @hampus_s

The Taproot soft fork will see the introduction of the Merkelized Abstract Syntax Tree (MAST), which adds a new condition whereby both sender and recipient can sign a settlement transaction.

Taproot will also implement the Schnorr Signature, an algorithm that allows users to aggregate multiple signatures into one for a single transaction, reducing the differences between regular and multisig transactions.

The Schnorr Signature can also be used to modify the user’s private and public keys, in a way that is verifiable to confirm the legitimacy of each transaction. Gregory Maxwell, who put forward Taproot’s original proposal in January 2018, wrote:

“I believe this development will allow for the highest level of anonymity possible for smart contracts, making them seem like the simplest payments possible. It does so without any overhead in the most common cases, without the use of questionable or impractical techniques, without requiring any. additional interaction between contract participants, and without requiring long-term storage of data. “

Taproot.Watch, a website made by Sjöberg, shows that the Taproot update will be activated on November 14th, after successfully creating 1,020 blocks.

Related: The value transferred to Bitcoin recently reached a new all-time high

Last month, the value transferred on the Bitcoin network has reached a new all-time high: On October 6, $ 31 billion worth of transactions were settled!

Compared to the beginning of 2020, the dollar volume transferred on average to the network has increased 40 times, also thanks to the adoption of Bitcoin in El Salvador and other jurisdictions:

“Last week, $ 31 billion in value was transferred to the Bitcoin network in a single day. This was an all-time high for the daily settlement value.

The global and decentralized payment system is becoming more and more dominant. “

There was $31 billion of value settled on the bitcoin network in a single day last week.

This is an all-time high for a single day of settlement value.

The global, decentralized payment system continues to become more dominant. (h/t @kerooke) pic.twitter.com/a6Q2FbPY3C

— Pump (@APompliano)

Willy Woo, on-chain analyst, commented in this regard:

“Currently, the Bitcoin network is processing $ 190,000 per second. The Visa network is processing approximately $ 130,000 for US users, while MasterCard is processing $ 55,000.”

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