Bitcoin’s Long-Awaited Taproot Update Activated!

Focusing on improving the privacy and security of the network, Bitcoin’s long-awaited update has been officially activated at block 709632.

Taproot is the first change to the Bitcoin protocol since SegWit, the last update that took place in July 2017. Taproot was approved by miners around the world in June 2021 after being recommended by core developer Gregory Maxwell in January 2018. The long time between offer and activation is associated with numerous rounds of reviews and tests. The update primarily aims to make the cryptocurrency network more private, secure and scalable, which is covered by three separate Bitcoin Improvement Proposals.

Thanks to Taproot, there is now a new type of cryptographic signature in Bitcoin. The update introduces Schnorr signatures, which can perform more complex transactions in Bitcoin (like those from multi-signature wallets), thus increasing the privacy and security of transactions.

Taproot also aims to develop the world’s largest digital asset to further compete with assets like Ethereum, known for its programmable smart contracts. The update will also provide smart contract flexibility.

So how will the update affect retail traders? According to some market experts, Bitcoin transactions for beginners will be more affordable, safer and more private. For example, keys will not be displayed as they are in a chain, as multi-signature outputs, single-signature outputs, and other complex smart contracts can look the same and not be distinguished from each other.

Simply put, Taproot is enabled to make the Bitcoin network better and more robust.

Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.

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