DailyCoin
Published May 11, 2021 08:09AM ET
Updated May 11, 2021 08:30AM ET
Bitcoin’s Taproot Upgrade: How Will It Change The BTC Ecosystem?
The decentralization of Bitcoin has made it a herculean task for any major modification to be carried out on the network because of the sheer number of actors involved and their diverse backgrounds. However, it seems a consensus has been reached, birthing the Taproot upgrade, which will bring new benefits that will improve the functionality and value of the network.
Bitcoin’s Taproot: A long Time Coming
Perfection cannot be attained, but a series of steps can bring us closer to the goal, and this is what Bitcoin aims to achieve with the Taproot upgrade. The Taproot upgrade is designed to improve the underlying technology on which Bitcoin is built, giving it the value to compete favorably in the crypto ecosystem.
Bitcoin’s Taproot upgrade is a watershed moment because it is the first significant upgrade on the network since 2017. This has generated a ton of attention because of the way in which consensus was reached. Bitcoin’s decentralized nature makes it incredibly difficult for a consensus to be reached because of the diverse interests on the network. However, the proposed change was widely accepted by key players in the industry.
The Bitcoin Taproot upgrade utilizes the Schnorr signature scheme and the Merkelized Abstract Syntax Tree to ease the conversion of complex Bitcoin transactions. According to Lior Yaffe, CEO of Jelurida, these technological upgrades are designed to prioritize the privacy of users and “make the Lightning Network a mainstream payment platform.”
On the Flipside
Changing The BTC Ecosystem One Step At A Time
The Bitcoin Taproot upgrade, if successfully implemented, has the benefits of potentially revolutionizing the ecosystem. It contains several features which contributed in no small measure to the support it has gained from key players across the industry.
The most significant change is the increase in privacy that it offers to users. This privacy feature does not affect Bitcoin addresses. Instead, it makes complex transactions indistinguishable from simple transactions. Through the use of the Schnorr signature scheme, the Bitcoin ecosystem is set to enjoy the functionalities of smart contracts. Furthermore, the Bitcoin Taproot upgrade offers lower transaction fees and will make transactions on the Lightning Network a lot cheaper.
Ultimately, these features and improvements will be geared toward improving the value of the cryptocurrency, providing an incentive for long-term holders and traders. While Ethereum aficionados are raving about the proposed upgrades coming to that network, Bitcoin has something up its sleeve that will have a positive effect on the entire network. Bitcoin currently trades at $56,625 and has a market capitalization of over $1 trillion, which could soar even higher after the Taproot upgrade.
EMAIL NEWSLETTER
Join to get the flipside of crypto
Upgrade your inbox and get our DailyCoin editors’ picks 1x a week delivered straight to your inbox.
[contact-form-7] You can always unsubscribe with just 1 click.
Continue reading on DailyCoin
Written By: DailyCoin
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.