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TAPROOT- Upgrade in BTC Explained in easy way

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1 year ago

Taproot ensures greater transaction privacy and efficiency thereby unlocking the potential for smart contracts, a key feature of its blockchain technology that eliminates middlemen from even the most complex transactions. Taproot is one of the major makeovers after 4 years in BTC. Taproot has near-universal support, in part because these changes are fairly incremental improvements to the code.

In the year 2018 by Gregory Maxwell, CTO of Blockstream, who developed Bitcoin Core, open-source software, proposed Taproot.

Does a Question arise what did the Bitcoin core do?
So if you, download Bitcoin Core, you can take part in validating transactions on the Bitcoin blockchain.

Bitcoin needed even larger block sizes that would allow it to be transacted quickly and cheaply like cash. That faction initiated a hard fork to form Bitcoin cash, leading to Taproot.

What leads to the evolution of Taproot?

The Bitcoin blockchain is composed of computer code. So, when you send a transaction on it, the “coins” are really connected to a script. These commands tell the blockchain what you can do with them. Usually, that means using a private key to provide a “signature” and prove you are able to spend them.

But people can make more complex transactions/Smart contracts, but it required multiple signatures before coins can be spent or mandating a waiting period known as a “timelock.”

When said coins are ultimately spent, those scripts become public on the Bitcoin network, adding a lot of data to an already bulky blockchain, while potentially exposing some details about the people involved in the transaction. Therefore, it makes the job of blockchain tracking firms such as CipherTrace and Chainalysis, and the government agencies to which these firms provide data, a bit easier

What is Taproot?

Taproot literally means “a straight tapering root growing vertically downwards and forming the center from which subsidiary rootlets spring.” Which promises transaction details buried deep in the metaphorical soil. For complex transactions, Taproot should enhance privacy while reducing the amount of data needed to make them, thereby lowering transaction costs that have become much higher as Bitcoin has become more popular.

Its privacy benefit will extend to applications that use time-locked contracts, such as CoinSwap, which mixes Bitcoin transactions to obfuscate the coins’ origin and destination. The same applies to Lightning Network, a second-layer network that bundles transactions together off-chain. These apps, due to Taproot, become more private.

Have you heard of the use of Schnorr signatures in Taproot?

The Taproot will switch over to something known as Schnorr signatures, which essentially makes multi-signature transactions unreadable.

In Taproot all the parties in a transaction can cooperate to make these complex transactions look like standard, person-to-person transactions.

It works on a combination of public keys to create a new public key and combining their signatures to create a new signature. It does this through a device called Schnorr signatures.

These souped-up signatures are also a game-changer for smart contracts, which are self-executing agreements that live on the blockchain. Smart contracts can theoretically be used for practically any kind of transaction, from paying your rent each month to registering your vehicle.

What’s the current status?

Bitcoin miners — those who mine new blocks on the network — had to literally “signal” that they supported the upgrade during a two-week period. (The “difficulty” of mining Bitcoin adjusts every 2,016 blocks, or about two weeks, depending on how quickly miners are creating new blocks; the goal is to average a new block every 10 minutes.)

In order for the upgrade to go through, 90% of mined blocks during that period needed to include data from the miners known as a “signal bit.” If the threshold wasn’t met, miners had another chance during the next two-week period, up until August 11.

After several times failing to hit the 90% threshold, the network’s miners reached the target on June 12, with two months to spare.

Assuming nothing goes wrong, Taproot will go live in November.

Why 90%?

Bitcoin is a global project with millions of stakeholders, including developers, miners, institutions, and individuals. As such, there needs to be broad buy-in for substantive changes.

The standard process for getting buy-in is to submit a Bitcoin Improvement Proposal (BIP). BIPs include code changes to the Bitcoin protocol and can be put forward by anyone.

Some wanted to move forward with Bitcoin Improvement Proposal (BIP)9, which made the upgrade contingent on miner support. Community members, in public meetings, ultimately thought for a proposal for adoption called “Speedy Trial,” which gave a three-month period for miners to signal with a 90% threshold needed for activation.

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