Taproot, expected update of Bitcoin, was integrated exactly one year ago to the source code of Bitcoin Core, the client or software most used to interact with this protocol and its network.
Since that October 15, 2020, when CriptoNoticias reported the integration of Taproot to Bitcoin Core, this solution has gone through several stages of discussion with the participation of developers and the community, being the most important Bitcoin improvement proposal since Segregated Witness (SegWit, 2017).
Despite some tense episodes and discussions about Taproot, the Bitcoin upgrade proposal managed to break through without a hitch and will definitely go live next November at the height of block 709,632. Less than 5,000 blocks to go!
What is Taproot and why is it so important to Bitcoin?
Taproot (BIP 341) is a Bitcoin enhancement proposal or Bitcoin Improvement Proposal (BIP) created and published in 2018 by developers Gregory Maxwell and Pieter Wuille.
Also, in the opinion of other developers like Max Hillebrand, Taproot is an extremely important solution as it will bring privacy, scalability and also usability to Bitcoin.
The implications of Taproot for Bitcoin could be highly beneficial for its users and the protocol, which we also discussed in CryptoNews in October 2020.
What does Taproot bring to the table?
Schnorr is an algorithm for the generation of digital signatures, which allow us to validate our Bitcoin transactions at the time of sending them.
This solution was added to the Bitcoin Core code library in mid-September 2020, CriptoNoticias reported, as well as the MuSig2 method, which uses Schnorr to make the use of multi-signatures in Bitcoin more efficient, secure and private.
Funny thing about Schnorr is that it comes to replace the ECDSA elliptical curve algorithm that was chosen by Satoshi Nakamoto in 2008 to work on Bitcoin. This is one of the notable changes from the original protocol and the versions that have been released so far.
Schnorr has the power that it can generate a unique signature from other combined signatures, which brings huge benefits in privacy and also makes data processing lighter, making Bitcoin transactions a bit lighter.
For its part, Tapscript, is a new command line that will allow to expand the spending conditions of bitcoin (BTC), giving the protocol capacity to execute smart contracts.
One of the virtues of Tapscript, is that it can process all scripts or spending conditions present in a transaction, but when executing it, it only reveals to the network the script that was used. This is also one of the stronger privacy, capacity and efficiency points that Taproot includes as a solution.
The Taproot Activation Path: Avoid Past Mistakes
As Taproot is an update that makes substantial changes to Bitcoin, its activation could not be taken lightly, for security reasons.
Specifically, there is a precedent in Segregated Witness, SegWit or Segregated Witness, a scalability solution whose activation generated conflicts in the Bitcoin user and developer community between 2017 and 2018, in what became known as the Block Size War (Block Size War).
This “war” divided the opinions of the ecosystem between the alleged need to increase the size or capacity of data that the blocks of the Bitcoin blockchain can store, and the technical and security problems for the protocol that this entails.
Eventually, SegWit prevailed by preserving the integrity of the Bitcoin blockchain and the size of its blocks, but its activation was contentious and resulted in several forks or Bitcoin forks like Bitcoin Cash (BCH).
From the beginning, the idea was that the same did not happen with the activation of Taproot and CriptoNoticias was there to report every proposal, change or decision that was made in this regard.
In November 2020, a survey resulted in the option that Taproot should be activated by a signaling mechanism from Bitcoin miners.
Bitcoin mining pools also began to participate in this initiative, announcing whether or not they were in favor of Taproot. By December, more than 90% of the hash rate or hash rate of Bitcoin miners supported the implementation of Taproot, although there was still a way to go for its activation.
In January 2021, Bitcoin Core already included Taproot and Schnorr in version 21 of its client, ready to be evaluated by developers without it being activated on the mainnet yet.
By February of this year, developers and community members decided that Taproot was to be activated by Bitcoin users, through its nodes. However, it quickly changed strategy, when that same month it was determined that miners would lead the activation of Taproot, although this turn did not leave users out.
Make a quick decision to avoid security incidents
However, doubts still prevailed as to whether the miners would keep their word to activate Taproot when the time came, so another mechanism called Speedy trial o Quick Test.
This method had a period of 3 months of signaling for the miners to confirm whether or not they want to activate Taproot. The dynamics was that each mined block would include an affirmative or negative signal about Taproot.
The goal was to block (lock-in) the activation of Taproot until November 2021, once the miners confirmed their answer in 90% of 2,016 blocks of each difficulty period.
In the context of that debate, some developers disagreed and released an alternative version of Bitcoin Core with some modifications that, in their consideration, were better for activating Taproot. However, this version did not prosper and was criticized by much of the ecosystem.
After integrating the rapid test to Bitcoin Core, and starting it at the end of April 2021, with the support of the most popular mining pools, it was decided on the third attempt, on June 3, 2021, to activate Taproot for November of this year .
In mid-June, CriptoNoticias also reported how, despite the fact that the rapid test and activation of Taproot are mainly conducted by miners, the participation of Bitcoin users or nodes is essential for its security.
What can I do with Taproot?
On September 14, the client Bitcoin Core 22.0 was launched with general support for Taproot, reported CriptoNoticias. This will be the software or client that will be used in November when Taproot is activated on the network.
However, in the last year, dozens of developers have been working on various applications and tools that aim to get the best out of Taproot’s capabilities.
For example, one of the capabilities of Taproot is to allow several users to be collective owners of a certain amount of BTC. Also, there is a way to show you have bitcoins without showing where, that is, a proof of possession that preserves privacy.
Among other projects that await the activation of Taproot, there are those that allow exchanges between BTC and monero (XMR); or issue non-fungible tokens (NFT) based on Bitcoin. In addition, other projects allow discreet registration contracts (Discreet Log Contract), a type of advanced contract with oracles and that works on Bitcoin’s Lightning.
Criticisms and comments about Taproot are welcome
Although Taproot has been a mostly welcome solution, and its activation process has not caused much friction among the community, there are also criticisms and observations.
For example, some are of the opinion that Taproot can jeopardize the properties of Bitcoin that make it resistant to quantum computing. On the other hand, the developer Giacomo Zucco, pointed out that some adjustments should be made to the Lightning network so that this second layer of Bitcoin can take advantage of the privacy benefits of Taproot.
This last point, Taproot’s privacy, has been criticized by activist Edward Snowden. He ensures that this solution does not improve failures which, in his opinion, has Bitcoin in terms of privacy.
Despite the criticisms that other developers have also made, Taproot is perceived as a solution that can improve the privacy of Bitcoin micropayments.
In fact, a fairly accepted notion is that the privacy of Bitcoin will increase as more transactions of the Taproot type exist, we explain in CryptoNews.
Rest, either purses or wallets Bitcoin developers are preparing to adopt Taproot, and there are resources for programmers to learn about the new functionalities of this solution, as we prepare for its activation, which will occur approximately November 15, 2021.