An article to understand why the upcoming Bitcoin Taproot upgrade is so important?

The Taproot upgrade for Bitcoin is coming soon, but what exactly is it? What does it mean for the future of Bitcoin?

Since the implementation of the SegWit (Segregated Witness) upgrade in 2017, Bitcoin has not undergone a major upgrade. The SegWit upgrade at that time caused serious chaos in the Bitcoin community, causing a group of miners and developers to withdraw from the Bitcoin network in the form of a hard fork, and in the process created Bitcoin Cash ( BCH ). However, four years later, in 2021, Bitcoin will once again usher in the latest major upgrade- Taproot .

But what is Taproot? Why is it so important to Bitcoin?

What is Taproot upgrade?

Bitcoin Taproot upgrade will be November 16, 2021 by a hard bifurcation , will implement three new proposals for improvements to Bitcoin (BIPS) , all of these proposals will be merged together into the latest version of Bitcoin. The well-known Bitcoin developer Greg Maxwell proposed the three proposals BIP-340 , BIP-341 and BIP-342 as early as January 2020. By the end of 2020, 74% of these three proposals have been approved by the miners; by 2021 By mid-year, the miner approval rate of these proposals exceeded 90% , which means that these three proposals are finally ready to be launched.

First, the BIP-340 proposal will introduce the main components of the Taproot upgrade and deploy a feature called Schnnorr signature for the Bitcoin protocol , which will help solve some of the privacy and block space issues that SegWit brought in 2017; BIP -341 proposal will introduce Merklized Abstract Syntax Tree ( MASTs ) to make smart contracts on Bitcoin more secure; finally, BIP-342 proposal will introduce a new Bitcoin scripting language as the other two The addition of BIPs makes it possible for the future upgrade of the Bitcoin network to be realized through a soft fork (rather than a hard fork).

The above is a brief introduction to the Taproot upgrade. Let us understand each BIP proposal in more detail and explain in more depth what is about to happen.

  • BIP-340

An article to understand why the upcoming Bitcoin Taproot upgrade is so important?

The BIP-340 proposal can be said to be the most important component in the Taproot upgrade , because without this proposal, other proposals would not be realized.

We know that the current Bitcoin uses the Elliptic Curve Digital Signature Algorithm (ECDSA), which allows users to generate public and private keys, and allows users to sign transactions with the private key when only the public key is displayed. These are very standard methods and they work well. The algorithm also allows the use of more than 1 secret key to sign a transaction, but this leads to privacy issues and a larger transaction size : when 2 or more secret keys are used to sign a transaction , Which means that 2 or more public keys will be exposed, which is unnecessary and will reduce privacy. At the same time, it will make the transaction size larger and occupy more block space, resulting in a single The number of transactions that can be accommodated in a block is smaller.

BIP-340 was added to the proposal Schnnorr signature , allows keys polymerization (key aggregation). In other words, this will aggregate all the secret keys involved in a transaction into a single secret key . This means that only 1 secret key will be exposed, which allows multi-signature transactions to pay more attention to privacy ; it also means that the size of the transaction is smaller, allowing more transactions to be accommodated in a single block .

As the transaction size becomes smaller, this will make the cost of these transactions lower. For example, when you open or close a Lightning Network payment channel, you will use 1 multi-signature transaction to complete. This means that when Taproot goes online, the cost of opening or closing the Lightning Network channel will be lower, which makes the Lightning Network more private and cheaper to use .

Simple Wallet will automatically enable these features, which means that ordinary users do not need to worry, nor do they need to click on any additional options . And if you are using a more advanced wallet designed for advanced users , you will have some new options to use when making transactions.

  • BIP-341

An article to understand why the upcoming Bitcoin Taproot upgrade is so important?

The BIP-341 proposal is the source of the name for the entire Taproot upgrade. The proposal will introduce a feature called Taproot for smart contracts running on Bitcoin . In fact, the proposal is a use of the Schnnorr signature of privacy BIP-340 introduced solutions: BIP-341 will be created using Schnnorr signature Masts (Merkel abstract syntax tree), MASTs uses Merkel tree (Merkle Trees ) To make smart contracts more private and secure . When BIP-341 goes online, only the condition that is met by the smart contract will be revealed, and other unsatisfied conditions will be hidden.

This will make Bitcoin smart contracts more secure because there are fewer data points that hackers can use . The hacker will not know all the other conditions in the smart contract, but only one condition. Along this path, we will see a decrease in Bitcoin smart contract attacks and more privacy for those who use these contracts .

If you are a Bitcoin smart contract user, you don’t need to do anything to use this feature , it will be automatically applied after the hard fork upgrade is completed .

  • BIP-342

An article to understand why the upcoming Bitcoin Taproot upgrade is so important?

Finally, there is the BIP-342 proposal , which will introduce a feature called Tapscript , which is a scripting language. Tapscript improves the signature hash as a supplement to the Taproot function and Schnnorr signatures. The proposal also removed the 10,000 byte size limit of Bitcoin scripts, thereby making Bitcoin smart contracts more flexible and free . This gives developers more freedom to create smart contracts that are more exciting and have useful features . BIP-342 will also implement a function called “tagged public keys”, which will make it easier for Bitcoin to upgrade through a soft fork , and prepare for the future and development of Bitcoin.

What does the Taproot upgrade mean for Bitcoin?

An article to understand why the upcoming Bitcoin Taproot upgrade is so important?

The Taproot upgrade will take place on November 16, 2021, which means that these 3 BIPs will be online by then. More than 90% of Bitcoin miners have approved this upgrade , which means that we will not see the battle of computing power like the battle between BCH and BSV in 2018. The new mainnet code has been peer reviewed by more than 150 developers, which gives us confidence that we should not see any network fragmentation happening.

To a large extent, ordinary Bitcoin users will not notice or feel any impact of the Taproot upgrade . If you are a Lightning Network user, after the upgrade, when you open or close the Lightning Network channel, you will benefit from cheaper transaction fees and faster confirmation time. In addition, if you use smart contracts, your data and history will be more secure than ever.

Bitcoin core ( Bitcoin Core) wallet users will need to upgrade their client to the new version, but for others, you do not need to do anything . This upgrade should be a smooth and seamless transition to the new upgrade, without network interruption during the upgrade.

Taproot is an exciting upgrade that lays the foundation for Bitcoin’s continued expansion, development and growth. Let’s wait and see!

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/an-article-to-understand-why-the-upcoming-bitcoin-taproot-upgrade-is-so-important/
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