ZoneBitcoin EditorialIf you missed the crypto news of the week, know that Bitcoin has just gotten a new skin. In general, Bitcoin updates always bring good improvements as you will see. The network evolves with practices, and that alone reminds us why Bitcoin is in first place.
Indeed, to meet the requirements of its users and face competition from blockchains like Solana and Ethereum, the queen of digital currencies had no choice but to make major changes.
The platform has decided to title this series of modifications Taproot. The basic idea behind this change is to extend the scope of use of virtual currencies by allowing its blockchain to take into account even more complex transactions, particularly in the processing of smart contracts.
This modification is causing a lot of noise because we have to take a leap back in 2017 to see such a change with the SegWit project. This network upgrade consisted of increasing the rate of transactions carried out on the blockchain.
In terms of trading and prices, Taproot perhaps explains the 47% increase that Bitcoin has just experienced at the start of November.
Would you like to know more about this change in Bitcoin? I will explain everything to you below down to the smallest detail.
What is the Taproot Project?
Taproot had been in discussions for several months, but we were just waiting for its implementation. To return in detail to this project, it must be said that it is subdivided into three specific phases.
More initially, it was the introduction of “Schnorr” the digital signature that caused a sensation. Its goal is to increase security during the transactions that users will have to carry out on the Bitcoin blockchain.
That's not all, with Schnorr you can also initiate more complex smart contracts. In reality, it was in 2016 that steps were taken to implement these upgrades.
It was finally on November 14 that Taproot was activated on the block 709 632. It is important to emphasize that all transactions supported by blockchains are done in batches or blocks. These can only contain a certain number of transactions. In this area, Ethereum has always dictated its law to Bitcoin.
Does Bitcoin want to compete with Ethereum on smart contracts?
It's no open secret that aside from market capitalization, Bitcoin has very few areas where it outperforms its direct competitor. Ethereum.
This is even what still makes Taproot interesting, because it is a direct challenge to challenge Ethereum on smart contracts and if possible do better than it. Possible? Maybe…
With the data hacking that platforms are experiencing, the question of security of exchanges is always brought to the fore when launching new projects. Taproot is no exception to the rule and makes a point of securing transactions. By integrating Schnorr signatures, you should be aware that transactions deemed complex and requiring a plurality of signatures could be confused with standard transactions. As you will have understood, all exchanges on the blockchain will now be private and more secure. We must not forget that improvements also concern the efficiency of transactions and the reduction of transaction fees.
And the investors in all this?
The improvement brought by Bitcoin was certainly intended to attract investors while reassuring them. Many specialists also agree on the fact that these major changes brought by Bitcoin are the beginning of a vast series of innovations. This vision reflects the feeling that emerged in 2017 during the last major update of the protocol.
This improvement had opened the doors to the Ligtning Network. We all know how much this upgrade simplified Bitcoin payments by promoting speed and lower prices.
Thus, investors remain optimistic and believe that Taproot will do the same with new products based this time on smart contracts.
Is Bitcoin at stake for its future with Taproot?
The question of the future of Bitcoin is a bit exaggerated, but the question must be asked. You will notice that the developers of the currency expect a lot from Taproot. Indeed, the modifications made aim to boost the capabilities of the blockchain so that it is capable of processing smart contracts without malfunction. This is a major challenge, because the use of money will become more democratized. But beyond performance, it is above all the fact that Bitcoin is no longer so far behind Ethereum for smart contracts which excites developers even more.
All this will obviously have a positive impact on the development of the decentralized finance (DeFi) and non-fungible tokens (NFT) on the Bitcoin blockchain.
What should we remember about Taproot in concrete terms?
A lot will change with this improvement for Bitcoin, if the update is done correctly.
As we said from the outset, it is above all in terms of performance that the king of financial assets virtual will evolve.
Taproot therefore becomes an efficient and secure way for the Bitcoin blockchain to support a denser number of smart contracts. Truth be told, it was a little frustrating for users and members of the BTC community to be behind currencies that were less important in terms of market capitalization.
It is not only the number of contracts processed that will evolve, it is also the speed and quality with which the processing is carried out which is perfected. Basically, optimizing the exchange management process on the blockchain significantly reduces the cost linked to the various transactions carried out.
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Disclaimer : This article is provided for informational purposes only. This is not financial, legal, tax or investment advice. Always do your own research before investing in a project.
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