Explained: Bitcoin’s Major Taproot Upgrade. How Will It Benefit Bitcoin?

bitcoin BTC taproot blockchain upgrade
Bitcoin’s major upgrade in recent years – Taproot is in the countdown. As a major upgrade in the Bitcoin blockchain, what impact will Taproot have on bitcoin? For bitcoin (BTC) investors, what are the key points of Taproot upgrade to note?

As the first Bitcoin blockchain upgrade in 4 years, the Taproot upgrade is scheduled to be implemented in block 709632. And, it is just about 432 blocks away. Thereby, the Taproot upgrade is set to launch on November 14.

What exactly is the Taproot upgrade, and how will it benefit bitcoin? The Taproot upgrade includes 3 Blockchain Improvement Proposals (BIPs): BIP-340, 341, and 342. To put it simply, the Taproot upgrade will speed up bitcoin transactions, enhance smart contract features, and improve privacy protection.

On the technical side, Bitcoin’s Taproot upgrade introduces Schnorr and MAST.

Bitcoin’s “multi-sig” transaction allows users to set more than one private key required to execute a bitcoin transaction. However, the multi-sig feature will explicitly reveal all of the individual public keys in the transaction. Also, this makes transactions requiring more memory storage.

Benefits from Taproot Upgrade: Faster, Cheaper Bitcoin Transactions

After the Taproot upgrade, in Bitcoin’s multi-sig transactions, users can just add keys together and wind up with a single public key. Then, everyone’s private key shares can sign for the transaction, without revealing all individual keys. Therefore, Taproot upgrade improves privacy protection and reduces the memory space required for bitcoin multi-sig transactions. So, one block can accommodate more transactions.

Generally, investors who buy and hold bitcoin can benefit from more secure data protection and smart contract functions – Not much difference in usage experience.

Meanwhile, if you are a Lightning Network user, you will enjoy faster confirmation, and lower transaction fees in payment channels.

What’s more interesting is that Taproot is Bitcoin’s first major upgrade since the SegWit upgrade in 2017.

In 2017, the SegWit upgrade led to “civil war” in the Bitcoin community on the network’s scalability. That refers to the limitations of the Bitcoin blockchain for processing multiple transactions. After the SegWit upgrade, some miners and Bitcoin’s core developers launched Bitcoin Cash (BCH) via a hard fork.

The content of this webpage is not investment advice and does not constitute any offer or solicitation to offer or recommend any investment product. It is for general purposes only.

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