Bitcoin / Blockchain / Crypto News · November 30, 2021

Will Taproot Upgrade Benefit Bitcoin Network?

The second most important upgrade implemented on the Bitcoin network is called the Taproot soft fork. The update has gone live on the mainframe of Bitcoin during the weekend. The investors who are invested in the top coin are excited about the latest development. This is the second most prominent update added to the Bitcoin network since 2008. The first most noteworthy update added to the beacon blockchain project was SegWit.

One of the most important developments of SegWit is witnessed in the form of the Bitcoin Lightning Network. However, Taproot is concerned with improving the security protocol associated with Bitcoin and other issues like transaction anonymity protocols. For the time being, the transaction confirmation protocol used on the Bitcoin network gathers a lot of unnecessary data. However, the replacement with the MAST signature is going to make it more efficient and selective.

Another important upgrade added to the Bitcoin network courtesy of Taproot is through the Schnorr Signature. This protocol is used to introduce the signature aggregation technology on the network. Before, Taproot Bitcoin used Elliptic Curve Digital Signature Algorithm that created a visible distinction for the multi-sig transactions.

However, now the network will be able to increase the privacy of the transactions by making it impossible to distinguish between single and multi-signature options. Furthermore, all the outputs that are generated with every single Bitcoin transaction are going to be sent to a singular Taproot output. Such a process will make the network more secure and untraceable for the users.

Bitcoin Network is now Compatible with Smart Contracts

Another key feature added to the Bitcoin network with the addition of the Taproot upgrade is improving the data efficiency with the help of its updated signature algorithm. With the new feature, the Bitcoin network has increased the capacity and compatibility with programming and application development. Taproot also complements the scalability factor of Bitcoin that further complements the lightning network.

Additionally, the network is also more accepting of smart contracts. The direct effect of Taproot on smart contracts is making them cheaper and more compact that addresses the issue of large storage on the Bitcoin blockchain. However, experts have claimed that the Bitcoin network has ways to go before having the capabilities of the smart contract as advanced as Ethereum.