Real-world use cases are one of the main drivers of adoption for every crypto ecosystem, and the same is true of the Bitcoin (BTC) network. In the next seven days, the Bitcoin protocol will undergo a minor fork process called the Taproot upgrade, which aims to improve network privacy, efficiency, and smart contract capacity.
Taproot is Bitcoin’s first major upgrade since August 2017, which saw the introduction of Separate Witness (SegWit) and led to the launch of the Lightning Network. While the previous fork primarily sought to overhaul the scalability of transactions and improve the scalability of the Bitcoin network, the Taproot upgrade aims to renew transaction efficiency, privacy, and support for smart contract initiatives.
The Taproot upgrade is set to publish after achieving 90% consensus among Bitcoin miners (mining nodes). On the same day in June 2021, Bitcoin developer Hampus Sjöberg tweeted the announcement:
hampus_s hampus soberg June 12, 2021
The Taproot soft fork will see the Merkelized Abstract Syntax Tree (MAST) entry, which introduces a condition allowing the sender and receiver to sign a settlement transaction together.
In addition, Taproot will also implement Schnorr Signature, an algorithm that allows users to group multiple signatures into one for a single transaction, reducing the inherent visual difference between normal and multiple transactions.
The Schnorr signature scheme can also be used to modify a user’s private and public keys, in a verifiable way to confirm the legitimacy of each transaction. According to the original Taproot suggestion from January 2018 by Gregory Maxwell:
“I believe this architecture will allow as much anonymity as possible for fixed-party smart contracts by making them appear to be the simplest payments possible. It achieves this without any additional expense in the general case, calls for any superficial or impractical techniques, and requires additional rounds of interaction between contract participants, and without the need for permanent storage of other data.”
At the time of writing, Taproot.Watch, a website created by Sjöberg, shows that the Taproot upgrade will be activated on November 14 after 1020 blocks have been successfully minted.
Related: Bitcoin Network Signs High Daily Settlement Volume
Just last month, the daily settlement value of the Bitcoin network reached an all-time high after settling $31 billion of transactions on the chain.
Compared to the beginning of 2020, the network’s daily settlement volume has seen a 40-fold increase, backed by mainstream Bitcoin adoption in El Salvador and other jurisdictions.
Last week, $31 billion of value was settled on the Bitcoin network in a single day.
This is an all-time high for a one-day settlement value.
– Pump (APompliano) October 10, 2021
“[The Bitcoin network is] It’s currently running ~$190K per second. Compare this to $130,000 per second by Visa for US customers and $55,000 per second by MasterCard,” according to On-chain analyst Willy Wu.