What precautions should you have in Bitcoin the day Taproot is activated

What precautions should you have in Bitcoin the day Taproot is activated

Key facts:
  • Taproot will hit Bitcoin at block 709.632.

  • Although unlikely, a network fork is possible if the nodes are not upgraded to Taproot.

Taproot is just around the corner and you can already speculate on what its activation will take place around November 16. One possibility is that, with less than 50% of the miners upgraded to Taproot, the network forks into two different ‘Bitcoins’. Although this is highly unlikely.

Bitcoin Optech, technical portal on Bitcoin, has publishor this Wednesday, November 3, in its weekly section “Preparing for Taproot”, a special about what will happen with this activation.

Block number 709.632 has arrived, the Bitcoin nodes with versions 0.21.1 and 22.0 of the Bitcoin Core client will begin to process transactions containing Taproot.

However, an adverse scenario is possible: that less than 50% of the nodes are updated, and bitcoin forks. However, the chances of this happening are very low. According to data from portal from Luke Dashjr, Bitcoin Core developer, currently 51% of the nodes are updated to Taproot. In previous days, as reported by CriptoNoticias, the figure only reached 49.79%.

What precautions should you have in Bitcoin the day Taproot is activated
The number of nodes that update to Taproot has been growing slowly, despite the fact that the soft fork will occur in less than 2 weeks. Source: Luke.dashjr.org.

As a reference to this type of fork, Bitcoin Optech cites what happened with the soft fork of the improvement proposal (BIP) number 66 in 2015. At the time of that update, the network forked in at least 6 blocks, marking an antecedent within Bitcoin.

The risk of the fork still present in Bitcoin

The bifurcation of the BIP-66 was due to miners starting to validate “invalid” blocks on a new chain. What happens in these types of situations is that, once the miner realizes and wants to return to the original chain, all confirmed transactions are invalidated, as they belong to another blockchain.

Taking this into account, it is advisable to wait at least 6 block confirmations to consider an irreversible bitcoin payment.

The scenario that the network may fork may still exist when Taproot is activated. This would only happen if the miners, deliberately mine invalid blocks from the Bitcoin mainnet. These would use outputs from Taproot, but disabling the security measures established within the Bitcoin Core protocol.

For a miner to be motivated to voluntarily mine invalid blocks, they must be willing to lose 6.25 BTC (about $ 380,000) for the blocks they mine. That scenario looks unlikely, as Bitcoin Optech sees it.

The best and most likely outcome is that everything goes well. Nothing that happens should be visible to normal users. Only those who carefully monitor their nodes or try to create Taproot transactions should notice something.

Preparing for Taproot # 20, Bitcoin Optech.

Recommendation during the activation of Taproot

As already commented throughout the text, Taproot arrives in block 709.632. Although the scenarios of possible forks are very remote, Bitcoin Optech recommends taking precautions against possible complications.

The main one is in the number of confirmations. Due to the antecedent of the BIP-66, Optech recommends placing a confirmation window greater than six blocks, even reaching 30 confirmations. This while Taproot is finally activated.

This will ensure that if the network forks while Taproot is activated, the payment confirmation transaction is validated within the correct Bitcoin network. Said recommendation must be taken into account before activating Taproot, that is, in block 709.631, at the latest.

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