Bitcoin’s biggest update in years brings smart contracts to the network

The bitcoin network recently saw a major technical update called Taproot, the biggest update to the network since 2017. The new update was activated on 14 November and will allow developers to integrate new features enabling improvements in privacy, scalability and security on bitcoin. Network. The upgrade is estimated to date from June when more than 90 percent of miners chose to “signal” their support. This was followed by introducing a waiting period between the lock-in and the date of activation. This period has given node operators the necessary time to upgrade to the latest version of Bitcoin Core, 21.1 – the version that includes the merged code for Taproot.

The update is the first major upgrade to the network’s code since Segregated Witness or SegWit (which was introduced in 2017), which resolved issues related to the scalability of the network. Taproot, which has seen universal support from the community since its idea, is a coming together of several technological improvements over the years rolled into one major upgrade.

One of the key features of the Taproot update is the introduction of Schnorr signatures, allowing more complex transactions to be carried out on the Bitcoin network. Until now, the cryptographic framework used by the bitcoin network was ECDSA, short for Elliptic Curve Digital Signature Algorithm, in which users sign a transaction using their private key to approve it. Taproot uses the Schnorr scheme which is faster and smaller than ECDSA with linear signatures.

With the new upgrade, transactions from multi-signature wallets will appear like any other transaction, thereby increasing the privacy and security of transactions. This would eventually pave the way for smart contracts, eliminating the need for middlemen and bringing bitcoin’s network up to speed with the likes of Ethereum which inherently enables smart contracts.

While the potential of Taproot is enormous, it will take some time for the upgrade to fully take effect. Users will be unable to send or receive new transactions unless the bitcoin wallet they are using supports it. This may take some time as most wallets do not support it at the moment. Bitcoin’s last major upgrade, SegWit, took almost two years to reach the adoption level of 50 percent.

A report from Coindesk suggests that, so far, only over half of the known bitcoin nodes are indicating support for the upgrade. The rest are still on older builds of the software, which means they won’t be able to implement Taproot’s new rules just yet — at least, until they upgrade to Bitcoin Core 21.1.

Interested in cryptocurrency? We discuss all things Orbital with WazirX CEO Nischal Shetty and WeekendInvesting Founder Alok Jain on the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.
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