Taproot is coming! On August 23rd, 2017, Bitcoin was upgraded to incorporate SegWit, which provided the lightning network pathway and ultimately assisted with solving the scaling issue. It has been four years since that update occurred, and thanks to Greg Maxwell’s unveiling of Taproot in January 2018 and its merging into the Bitcoin core library two years later, the time has finally come!
The highly anticipated Taproot upgrade will be the first upgrade in the Bitcoin network in the last four years. When it goes online on November 16th, 2021, it is expected to bring with it new capabilities to the Bitcoin blockchain. One of the most significant changes within this update will be the move from elliptic curve digital signature algorithm (ECDSA) to shnorr signatures which is a different way of implementing cryptography for the Bitcoin blockchain. Ultimately this means it will make things more efficient.
Shnorr signature scheme makes multisig better for Bitcoin, paving the way for several key additional improvements. First, it improves scalability, allowing more transactions per block due to the protocols update aggregating multiple signatures simultaneously. The next most notable is the much-needed incremental privacy update, the white elephant in the room. Privacy has been a massive topic of conversation. With the Taproot upgrade, there will be less data onchain which will generally improve privacy on the network.
Several other important updates will occur aside from privacy, such as improvements to smart contract functionality and lower fees. The advanced programmability of this upgrade allows for the potential for NFT’s and possibly even DeFi applications to be on the way. The path for bitcoin’s future looks bright, and the Bitcoin core community seems like they are all on the same page with the needed upgrade.
By David Gamble