The Bitcoin (BTC) network successfully activated the Taproot soft fork following a blocking consensus of 90% of miners and mining pools between blocks 709,488 and 709,632. The milestone marks the first major update for Bitcoin since August 2017, which saw the Launch of the leading Bitcoin layer two solution, the Lightning Network and Segregated Witness (SegWit).
The Taproot update aims to improve the scripting capabilities and privacy of the Bitcoin network. To do this, the fork introduces the concept of the Merkelized Abstract Syntax Tree (MAST). According to a dedicated Taproot website run by prominent Bitcoin developer, Hampus Sjöberg:
“[MAST] it can help make smart contracts more efficient and private by revealing only the relevant parts of the contract when they are spent. “
Speaking to Cointelegraph, Sjöberg noted that the activation of Taproot demonstrates that Bitcoin can perform network updates again, which is extremely important for its longevity. “I think that’s the biggest win”, added.
Sjöberg, who is also a developer of a Lightning wallet, Blixt Wallet, believes that Taproot allows exploring off-chain capabilities, so as not to put too much load on the Bitcoin nodes on the network.
Taproot is a 100 years softfork.
Merging every contract and use-case under a single transaction type “Pay to Taproot” will in the long-run yield a more fungible and robust blockchain.
This is how you do it.
This is how you design a blockchain.– Hampus Sjöberg âš¡ (@hampus_s) June 3, 2021
Taproot is a 100 year old soft fork.
Merging all contracts and use cases under a single “Pay Taproot” transaction type will produce a more fungible and robust blockchain in the long term.
This is how you do it.
This is how a blockchain is designed.
Furthermore, Sjöberg believes that MAST can also help improve the privacy of the old Lightning Network “if Lightning implementations decide to adopt Taproot.” The developers of the different Lightning Network node implementations met in Zurich, Switzerland a few weeks ago at the LN Summit 2021 to discuss possible upgrade paths:
“One of the things that was discussed in the meeting was whether it is better to update Lightning in small iterations or to do it as a big package.”
Sjöberg also explained how payment channels under normal circumstances can be made indistinguishable from normal transactions using Taproot for the Lightning Network:
“It is not possible to know if a Taproot transaction is a normal payment or if it belongs to a Lightning channel. This is important for the fungibility and therefore the resistance to the censorship of Bitcoin.”
The successful activation of Taproot is attributed to Speedy Trial, a soft fork deployment method that requires 90% of miners to signal update deployment. As Sjöberg explains, “The signaling method works in block periods of 2016, which means that within a block period of 2016, 90%, or 1815 of the blocks of 2016 have to signal that they are ready.”
As early as June 2021, Bitcoin miners achieved a 90% consensus for the first time and Sjöberg tweeted the announcement:
WE HAVE LOCK IN! #Bitcoin #Taproot
Video by: @TheGuySwann! https: //t.co/rCUp5VNCBX pic.twitter.com/YFLMTenWW0
– Hampus Sjöberg âš¡ (@hampus_s) June 12, 2021
WE HAVE BLOCKED IT!
Nevertheless, the Taproot update also marks the end of Speedy Trial deployments and future updates to the Bitcoin network will require the provision of new deployment methods. “Taproot opens up a world of possibilities, but the first thing I’d personally like to see is a ‘MuSig 2’ transaction.” Sharing tips for fellow Bitcoin developers, Sjöberg said:
“While we shouldn’t take anything for granted in Bitcoin, personally I would like to eventually see ‘Cross-Input Signature Aggregation’ as a future soft fork for Bitcoin.”
In the nearly 13 years of Bitcoin’s existence, the network has suffered numerous community-driven hard and soft forks. While the Taproot update has yet to prove its worth in the future, the Lightning Network continues to hit new milestones.
On September 28, the Lightning Network witnessed a 160% increase in the number of nodes in the span of 12 months, in addition to seeing a 170% jump in the number of channels since January 2021.
As of November 11, the capacity of the Bitcoin network before the Taproot soft fork was at an all-time high of 3,220 BTC, almost worth $ 210 million.
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