Taproot, the Bitcoin (BTC) upgrade that aims to improve privacy and security of the network, has been activated. Taproot is the most significant upgrade to the protocol since 2017.
The Taproot upgrade is officially activated
The Taproot upgrade is a project to enhance Bitcoin (BTC) with a new signature scheme known as Schnorr. This protocol adjustment opens up new possibilities for privacy, multi-signature wallets and security.
Taproot is widely regarded as one of the most significant improvements to the Bitcoin protocol. The upgrade was activated when the chain reached block 709,632 at 6:15 a.m. on Sunday, November 14. This definitely activated the first major BTC upgrade since the introduction of Segregated Witness (SegWit) in 2017.
The upgrade is the result of several years of work. This one was launched when Taproot was locked on June 12. Since then, miners and nodes have had time to upgrade to Bitcoin Core 0.21.1, the latest version of Bitcoin Core that contains Taproot activation and a few other improvements.
What is Taproot?
Taproot is an amalgamation of various technical innovations from the history of Bitcoin into a single upgrade. It was first proposed by Greg Maxwell in 2018. Since then, the 3 Bitcoin Improvement Proposals (BIPs) that were written by Pieter Wuille, Tim Ruffing, A.J. Townes and Jonas Nick
Previously, Bitcoin used the ECDSA signature algorithm where a user signs a transaction with their private key to approve the transaction.
Taproot is switching to a different signature protocol called “Schnorr”. Every transaction will now use this new signature scheme. In addition to being smaller and faster than ECDSA, Schnorr signatures have the advantage of being linear, which will enhance the privacy of Bitcoin transactions and allow for the creation of lighter, more complex smart contracts.
Taproot will have many positive impacts on various projects in the ecosystem. For example, multi-signature transactions, which require the signature of more than one signatory among a group, will be less expensive and easier to execute.
What’s next?
So far, only a little more than half of the known Bitcoin nodes have reported support for the upgrade. The rest are running older software, which means they won’t be able to apply the new Taproot rules yet, at least not until they upgrade to Bitcoin Core 21.1. But even then, the network will run smoothly.
So, activation does not mean that everything is over. Users will not be able to send or receive “next generation” transactions until their Bitcoin wallet supports it.
If history is any guide, it could take months or even years for wallets to jump on the bandwagon. For example, it took about 2 years for Bitcoin’s last major upgrade, SegWit, to achieve 50% adoption.
