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Bitcoin’s biggest code improvement in years won a key seal of approval over the weekend, CoinDesks Christie Harkin reports.
Why it’s important: in three years of creation, Taproot represents the ability of bitcoin to one day do more than a store of value: think of more agile smart contracts (similar to those of Ethereum) and better usability .
The Plot: The thing that stands out to industry watchers is an additional level of obfuscation that will make the protocol more private. In short, mixed bitcoin transactions will look the same as regular blockchain transactions.
What is the Bitcoin mix? Bitcoin is an open ledger that is quite easy to follow. Bitcoin mixers aggregate transactions in such a way that most detectives are not aware of where an individual transaction is sent. Depending on your perspective on privacy, mixers are favored by the prudent or the criminals.
Between the lines: This is why Taproot’s new upgrade splits in two.
It’s great if you think digital money should work like real money: Greenbacks don’t leave much of a trail for digital surveillance. This is potentially worrying if you view bitcoin’s pseudonymous traceability as an asset: Colonial Pipeline, anyone?
What to watch: Either way, it will be months before Taproot is alive in the wild. The upgrade will begin when bitcoin reaches a specified block height in November, giving miners and anyone operating a Coinbase node to your next door neighbor the opportunity to update their software.
After that, the developers will take over to integrate the new features of Taproots into the products that bitcoiners will actually use.
The bottom line: is this a new Bitcoin? No, despite some new features (and potentially bitcoin’s native decentralized finance, or DeFi), the original cryptocurrency will likely continue to do what it does best: be a native Internet store of value that exists. outside the scope of pesky central bankers.
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