Taproot upgrade for Bitcoin is all set to get locked in and at the time of writing more than 99% of Bitcoin blocks were signaling for the upgrade with only 14 blocks to go.
Chances are by the time you read this article it is already locked in. Github defines Taproot upgrade as
Taproot is a proposed Bitcoin protocol upgrade that can be deployed as a forward-compatible soft fork. The taproot will expand Bitcoin’s smart contract flexibility while offering more privacy by letting users mask complex smart contracts as a regular bitcoin transaction.
Taproot would combine “Schnorr signature scheme with MAST (Merklized Alternative Script Tree) and a new scripting language called Tapscript. This would, in turn, bring changes to the Bitcoin script that would cloak various information associated with a transaction.
The taproot upgrade once locked in would go for voting in November this year. Once approved and added as a soft fork, it would increase Bitcoin’s privacy and smart contract compatibility.
At present Bitcoin transactions can be easily traced on the blockchain without offering privacy to the user, but the Taproot upgrade would ensure that only a certain part of the Bitcoin transaction is traceable.
Taproot Would be First Major Bitcoin Upgrade in 4 Year’s
Taproot upgrade would mark the first major addition to the Bitcoin network since SegWit upgrade in 2017. It is also being considered a first step towards making Bitcoin a more private cryptocurrency.
There are many ways in which a Bitcoin transaction can be made harder to track like mixing tools, however, these add-ons can be easily traced especially at a time when blockchain monitoring tools have become more powerful.
Taproot resolves this issue and cloaks all the moving parts of the Bitcoin transaction. So let’s say a wallet initiates a transaction via a lightning network, a peer-to-peer transaction using the smart contract, but anyone monitoring these transactions would only see a peer-to-peer transaction.