For the traditional Bitcoin protocol, user data privacy and security are the most important. The Taproot upgrade will make the Bitcoin network more reliable, secure and efficient. The proposed Taproot upgrade has received more than 90% of the block support, which means that the upgrade soft fork activation will be implemented in a few months.
But why are we excited and looking forward to this upgrade news, what exactly is Taproot?
What is Taproot?
Taproot is a proposed Bitcoin protocol upgrade that can be deployed as a forward compatible soft fork. By combining the Schnorr signature scheme with MAST (Merklized Alternative Script Tree) and a new scripting language called Tapscript, Taproot will extend the flexibility of Bitcoin's smart contracts while allowing users to cover up complex smart contracts as regular Bitcoin transactions to provide more privacy.
So it is an upgrade of the existing Bitcoin blockchain technology, which can:
Enhancing user data privacy
Secure Transaction
Scaling Bitcoin with higher throughput to handle large transactions
Taproot target and Schnorr signature:
The main goal of Taproot is to change the way scripts run in Bitcoin to improve the privacy, scalability and security of the blockchain. It intends to achieve the same goal by providing Bitcoin with a scheme called Schnorr signature.
What is a Schnorr signature?
The Schnorr signature algorithm was originally proposed by German cryptographer Claus Schnorr in 2008. Schnorr uses multiple types of keys in complex Bitcoin transactions and generates a single signature, which is regarded as one of the advanced signature schemes by the crypto developer community. It uses advanced mathematical principles to provide a string of safety and precision, it is not trading ductility ( Malleability ) influence and validate relatively quickly.
Note: Transaction malleability means that the Bitcoin payment transaction can be modified after it is issued and before it is confirmed (to be precise, it is forged and copied).
How does Schnorr signature work?
Schnorr uses linear mathematical operations to support the aggregation of multiple signatures for a single transaction, and the same logic applies to multi-signature transactions. Combining public key and signature into "threshold public key" and "threshold signature" can make multi-signature transactions indistinguishable from any regular transactions.
Schnorr signatures are mainly known for their simplicity and efficiency in generating short signatures. In addition to the Schnorr signature, the Taproot upgrade also utilizes MAST: Merklized Alternative Script Tree.
What is MAST?
The full name of MAST is Merklized Alternative Script Tree, which is a proposed solution using Merklized tree. Merklized tree is a classic data structure algorithm invented by cryptographer Ralph Merkle.
To understand the MAST utility, we need to dig deeper into existing Bitcoin operations and understand P2SH (Pay to script hash).
P2SH script:
Basically all Bitcoins are "locked" in a script, which is a piece of software with a few lines of code embedded in a transaction in the Bitcoin blockchain.
This script defines how to spend tokens in the next transaction. The spending conditions usually involve providing a signature to prove the ownership of the token. Different conditions can be mixed and matched to create complex types of smart contracts. Starting in 2012, the token scripts that considered spending were no longer publicly visible at the beginning, and only the new owners of the tokens knew how to use them.
Pay to script hash: P2SH works its magic here. Initially, only the script hash is included in the blockchain. This seemingly random number holds tokens. When the owner spends tokens, it will display the entire script and the "solution" of the script at the same time, and then anyone can use the initial hash to check whether the provided script is indeed the original script that locks the token, and can get it immediately Draw a conclusion that meets the requirements of the script.
But the P2SH script mechanism has some shortcomings, what are they?
In P2SH, users who spend tokens still need to reveal all the conditions that may be met and those that cannot be met. The problems with this mechanism are:
First, make the operation quotation data intensive, because there may be multiple conditions that need to be identified and resolved
Second, it hinders data privacy. Since users are required to disclose all the conditions under which tokens can be used, everyone in the network can know this condition, and can even identify which wallet is being used, or even more, which will bring serious privacy consequences.
MAST is our hero, it overcomes the limitations of P2SH. Unlike P2SH, it does this by individually hashing all possible funding conditions instead of combining them into a hash column, and then adding these separate hashes to the Merklized tree, and finally generating a hash: For the Merklized root, this Merklized root "locks in" tokens.
The Taproot upgrade uses Schnorr signatures to further hide MAST to the point where people will never know the existence of the MAST structure.
Now that we have understood the two core technological changes included in the planned Taproot activation, it is time to understand how these changes will further enhance Bitcoin and help it improve.
How will Taproot benefit the Bitcoin network?
At the beginning we discussed how Taproot can enhance the way Bitcoin transactions work.
As mentioned earlier, Bitcoin transactions without Taproot currently use a series of complex functions, such as time locks or multi-signatures. These transactions are publicly visible to everyone, but once Taproot activation is successfully passed (expected to happen at the end of 2021), things will change in a larger way.
Enhanced privacy : Taproot integrates all transactions and multiple spending conditions into a single enhanced level of Bitcoin privacy
Less data to be processed : less data involved in transactions will increase network efficiency
Higher throughput : it will support more transactions per block, thereby increasing the overall TPS
Reduce Gas Fees : Due to higher transaction efficiency, less data needs to be processed, which will significantly reduce Gas Fees
Mitigating malleability : Taproot will ensure that signatures are no longer malleable, which is a greater security threat in the Bitcoin network
The Taproot Road of Bitcoin:
Due to the sell-off caused by multiple concerns, Bitcoin currently has experienced many painful corrections in the market, which are mainly caused by the futures market and ESG issues. Throughout the current week of May and June 2021, Bitcoin is still looking for its direction in shocks, and many experts believe that the adjustment will last for several weeks or months.
The adoption of Bitcoin as legal currency in El Salvador has brought great hope to the Bitcoin community and further strengthened people’s belief that this is a true store of value and the most reliable inflation hedge for legal currency. Now, the Taproot upgrade is expected to alleviate some of the security, scalability, and performance issues, which is another important trigger that can open the way for long-term recovery. We still need patience.
But I do strongly believe that:
Bitcoin is not only a cryptocurrency, but also a kind of hope. For ordinary people who have been deprived of the most basic rights to self-sufficiency and happiness, it is a true financial freedom. The polarization between the rich and the poor in this world has been expanding for a long time. Now this decentralized encryption world has given us a new platform, where it treats everyone democratically without any discrimination.
Bitcoin will continue to exist and will overcome all obstacles to change the world and make everyone better.
Yes may brother the security is very important