Bitcoin, the world’s oldest and most popular cryptocurrency, has received its first update in several years, and it now offers improved security and privacy thanks to its new Taproot code upgrade.
Bitcoin’s Taproot was activated over the weekend when it reached block 709,632, marking the cryptocurrency’s first major upgrade since 2017.
Taproot will help Bitcoin transactions become more private, efficient, and cost-effective by introducing a new type of signature known as Schnorr signatures. Simultaneously, this new upgrade will make it easier to execute smart contracts on the blockchain using Bitcoin.
Cryptocurrency competitors Ethereum has gained popularity in recent years, in part because its blockchain makes it easier to create smart contracts. While Ethereum will almost certainly continue to be the preferred cryptocurrency for smart contracts, Bitcoin’s Taproot upgrade will help bridge the gap between the two in terms of smart contract creation.
Upgrade to Taproot
The Taproot upgrade is a collection of three separate upgrade proposals for Bitcoin, according to a new report from CNBC.
In addition to facilitating smart contracts on the Bitcoin blockchain, the new upgrade will improve transaction privacy by allowing for multi-signature transactions using Schnorr signatures. These multi-address transactions will now appear as a single, standard transaction, providing greater anonymity and privacy to those involved.
Despite the fact that multi-signature transactions are more complicated to process than standard transactions, Scnorr signatures will reduce the amount of data required. Not only will this reduce transaction costs, but it will also improve transaction efficiency by reducing the amount of energy and time required to complete them.
Bitcoin will likely see a new wave of innovation now that it can be used as an alternative to Ethereum when putting together smart contracts, thanks to its Taproot upgrade.
