Besides Taproot, other updates are considered by Bitcoin Core developers. Bitcoin has not undergone any hard or soft forks for over two years after SegWit.
The Taproot proposal, an anticipated technological change for Bitcoin, is almost complete, according to Bitcoin Core developers. This can be considered as a remarkable update that arrives almost two years after its introduction.
First disclosed by developer Greg Maxwell in January 2018, Taproot offers a new degree of privacy by making all transactions, regardless of difficulties, seem the same as the blockchain’s data processors. The code adds to the network a very necessary function and brings with it important implications for scalability, fungibility and scripting innovation.
Taproot is expected to group with Schnorr, a related update that seeks to allow incorporating multiple signatures and allow the implementation of Taproot.
At the moment, the soft fork Taproot/Schnorr, proposed in May 2019 by Bitcoin Core developer Pieter Wuille, is undergoing the feedback phase, in which developers recommend and review possible changes in the draft proposal.
Last December 17th, Wuille published an upgrade of the project, in which he revealed that the developers were completing the assessment of all the comments on the review and that the Taproot proposal was almost completed.
The proposal that is being conducted is designed to save between 30% and 75% in transaction fees and to accelerate block validation up to 2.5 times, as predicted by Square Crypto product manager Steve Lee.
This process has generated a lot of interest and excitement among different parts of the cryptocurrency ecosystem. According to recent survey data, Taproot leads the list of technological developments around Bitcoin that are being followed.
Bitcoin relies on public-key cryptography to validate transactions. The elliptical curve digital signature algorithm has several flaws regarding privacy and fungibility, which the soft fork Taproot/Schnorr seeks to fix by hiding specific types of payments from external observers.
Lee provides the example of an exchange house that includes an online key, a trusted third-party password and an emergency backup key for the cold wallet. Conventionally, the participants would need to pass on the three keys, as well as the two signatures used to spend the money.
However, the proposed upgrade would add these keys in a single Schnorr signature, which would then be used to validate a Taproot exit key that represents all the complexities involved.
As a consequence, the observers of the blockchain observers would just see a single exit without knowing which of the two keys was deployed to validate the transaction. This would reduce the size of the transaction, save expenditures and improve privacy, according to Lee.
Taproot also facilitates innovation in signature management, since it allows for complicated signature and password arrangements and eliminates limitations on the number of scripts to spend money.
Taproot is attracting great interest from the Bitcoin community, according to survey data. The Taproot/Schnorr upgrade was the third most popular topic that industry participants said to be most excited about seeing in 2020.
Jimmy Song, a developer at Bitcoin Core and Bitcoin Fellow at Blockchain Capital, echoed this optimism and predicted that Taproot will not only save money and block space but will also allow new features and generate more interest from the network.
By Willmen Blanco