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The Bitcoin Taproot upgrade, which is the first crypto asset upgrade in four years, was recently approved by miners around the world. The upgrade has received consensus from the majority of stakeholders and many experts believe it could be a revolutionary time for the world’s largest cryptocurrency, as support from miners to accept and implement this upgrade. level was overwhelming.
The Taproot upgrade is expected to go into effect from November.
What is the upgrade?
According to Sathvik Vishwanath, co-founder and CEO of Unocoin, this upgrade has two sides. On the one hand, it should bring better confidentiality and transparency in transactions, and on the other hand, it is the first time that the capacity of smart contracts has been added to the bitcoin blockchain network. These features are already available in other different coins and as it has been a successful experience so far, they are even copied into bitcoin, which is the popular and widely spread cryptocurrency around the world, ”he said. he declares.
Early blockchain users, and bitcoin in particular, have advocated the huge potential of the technology. Over the years, several changes have been made to existing cryptocurrencies and thousands of new cryptos have entered this market.
Bitcoin, despite being the most popular crypto, had its last major upgrade four years ago. Many called the previous upgrade a “civil war” of some sort because it caused a massive ideological divide, ”said Edul Patel, CEO and co-founder of Mudrex, an algorithm-based crypto trading platform. .
Why was this upgrade necessary?
Upgrading Taproot for bitcoin would allow smart contracts to be executed efficiently and affordably. Currently, smart contracts are typically executed on the Ethereum network due to their higher efficiency. However, with the Taproot upgrade, Bitcoin has the potential to rise and integrate into mainstream finance. Additionally, bitcoin is a public blockchain, and anyone can monitor transactions that occur on the network, which is of concern to many.
Upgrading the taproot for bitcoin would allow smart contracts to take up less space on the network. From a technological point of view, the bitcoin network currently uses the “Elliptic Curve Digital Signature” algorithm, which takes up more space. It will be switched to “Schnorr signatures” which will make the simplest transactions potentially indistinguishable from complex transactions. This translates into greater anonymity in the network while maintaining transparency, ”Patel said.
Currently, running smart contracts on Bitcoin’s base protocol layer isn’t exactly feasible. It is quite expensive and time consuming, which makes it almost useless. Many experts suggest that smart contracts are one of Taproot’s main selling points. Smart contracts can be used for almost any trivial financial transaction, such as paying utility bills to pay rent, among others.
What impact will this have on investors?
The evolution of the price of cryptocurrencies depends on the practical use cases of the digital asset which are adopted by the masses.
Bitcoin’s Taproot upgrade could well be the key element that would propel it into mainstream finance. Ultimately, the kind of revolution that upgrading from Taproot could bring to Bitcoin is phenomenal, ”Patel said.
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