Bitcoin is finally one step closer to make history with Taproot, a major event perhaps as important as SegWit or the last halving.
Taproot, the most ambitious Bitcoin update since 2017, has been finally approved by miners and was locked in for implementation in November this year.
Taproot is (Or Will Be) Finally Here!
Because of its decentralized nature, the deployment of a Bitcoin update must go through an approval process and cannot simply be released to the world at the will of the Core developers.
In the case of Taproot, miners had to reach a consensus and send a signal that they were ready to support it. 90% of the blocks mined during a difficulty period needed to have a signal, and today the milestone was achieved.
A difficulty period is the amount of time that passes between two difficulty adjustments. The Bitcoin network works by balancing the computational power contributed by miners and the difficulty of the algorithms that these miners must solve.
The idea is to come up with operations ever so hard that miners solve one block every 10 minutes. However, sometimes more miners enter the network (so with more computational power, blocks are mined a little faster), or some shut down their machines (congesting the network as miners suffer more to solve these problems).
When there is a lot of power, the network automatically increases the difficulty during the readjustment (and vice versa, see what happened after the floods in China that affected many mining farms). This occurs every 2016 blocks, which are usually mined every two weeks.
The voting process to activate Taproot happened during these last 2016 blocks, and it is known as a Speedy Trial.
If miners had failed to reach an agreement during the Speedy Trial, the next step would have been a UASF (User Activated Soft-Fork). This process had the risk of bringing network nodes into conflict with each other.
Why Is It So Important?
Taproot is a bitcoin soft fork that promises more secure, private, and lightweight transactions. The latter is of particular importance to the network as it helps ease the burden of transactions, making bitcoin a bit more scalable and helping to lower transaction fees a bit.
Taproot comes hand in hand with Schnorr signatures, a signing method positioned as an alternative to the current ECDSA signatures. After activating these signatures, it will be possible to create a kind of master key to sign several transactions. The master key would actually be a kind of merging of several signatures into one, which potentially saves space as the transactions generate fewer data.
Many BTC enthusiasts are optimistic about Taproot not only because it can potentially improve the features of the Bitcoin blockchain but also because it could be considered as a bullish sign among investors.
But others are skeptical. One example is Edward Snowden, who argues that Taproot can be harmulf if approved.
Public speaking is hard, but my intended point was not opaque: neither Taproot nor Lightning come even *close* to addressing Bitcoin’s privacy problems — and in fact even provoke arguments for how they hurt it (at least short term). That’s not to say they’re worthless…
— Edward Snowden (@Snowden) May 8, 2021
Now it is just a matter of time to find out who is right.