Taproot, the long-awaited upgrade is due to go live this weekend, with the potential to transform Bitcoin.
Understanding what about the Bitcoin network necessitated the Taproot update adjustments is essential to comprehending why they were required. Taproot is a soft fork of Bitcoin’s blockchain created by the combining of multiple Bitcoin Improvement Proposals (BIPs). A soft fork is a suggested upgrade that becomes the sole blockchain over time, meaning the old one (in this case, Taproot) will cease to exist until the new one (in this case, Taproot) is completely embraced.
WHICH PURPOSE DOES TAPROOT UPGRADE SERVE?
There are three types of upgrades, each of which has an impact on the others and is required for the final result. Taproot successfully enhances security while also providing flexibility and scalability by introducing a new language that is constantly growing. The three sorts of adjustments to consider are as follows:
Signatures of Schorr (BIP 340)
Superior security, lower fees, and flexible multi-signature transactions are all possible with this new type of signature. How?
SigHash (Signature Hash) is applied to the transactions, which means that the information becomes immutable once SigHash is applied (unchangeable). The transaction loses its validity if the information is modified. There is no way to change anything without damaging the SigHash. Previously, a tiny piece of information could be updated without the transaction losing its legitimacy due to “malleability.” Signatures, to be precise.
The aggregation of public keys and signatures is possible using Key and Signature Aggregation. Previously, if you had a transaction with ten persons, you would have needed ten public keys, ten signatures, and a validator to check each key and signature. We can combine all ten public keys into one key and all ten signatures into one signature using key and signature aggregation. Instead of having to do this ten times, the verifier now only has to do it once. This is where the majority of the computational processing takes place.
Superior security is accomplished throughout the aggregation phase since on-chain heuristics (data recorded) will be unable to distinguish between multisignature and single-signature transactions, allowing for greater anonymity.
Batch Verification is an add-on to the above-mentioned aggregation, in that we may now “batch” together several transactions to verify them all at once, rather than one at a time. This is essentially “bulk verification,” and it also results in fewer resources being wasted.
Taproot 2 (BIP 341)
Because here is how the new system connects with the old one, the entire update is titled after this section. The Bitcoin Script Update adds Merkelized Alternative Script Trees and allows the scripting language to use Schnorr signatures (MAST).
Pay-To-Taproot (P2TR) allows you to make your own decisions. You can utilize Schnorr signatures or the Merkle root that MAST provides. Satisfy your own conditions, which allows for faster transaction processing when the Merkle tree isn’t required.
Rather than requiring all of the available scripts for the transaction, (MAST) summarizes them. MAST’s single-script hash really represents a number of different scripts. You only need to supply your script and verification that it is stored in the Merkle root to spend a bitcoin. Previously, considerably more scripts and extensive checking would have been required.
3. Tapscript is a collection of “opcodes,” which are just lines of code that execute commands on the Bitcoin protocol and have been changed to accommodate Taproot’s new features. It’s technically a language, although it’s more of an update to Bitcoin Script.
The 10,000-byte script size limit in Bitcoin Script will be abolished, allowing for much larger scripts, or Taproot contracts. It also removes the limit on “opcodes,” allowing for more freedom in future features and coding. The removal of the script size limit and the unrestricted expansion allowed in scripting provide a clear path to smart contracts.
WHY DOES NEW UPDATE MATTER?
Every Bitcoiner’s lifeblood is security. Unwilling to compromise their essential beliefs in hard, solid money, the Bitcoin community took its time to ensure that Layer 1 (the Bitcoin protocol) was immutable, efficient, and 100% safe before “upgrading.” Other platforms hurried to Layer 2 (open apps based on the original protocol), whereas Bitcoin waited until base-layer security was a foregone conclusion. As a result, some claim that Bitcoin had lost the race to create smart contract capacity, and that solutions like Ethereum were first to market, altering our perceptions of decentralized applications.
The playing field has been leveled by Taproot. Bitcoin now provides a clear road to smart contracts, decentralized autonomous groups, and other forms of decentralization. Even without the access that Taproot will give future developers, products like the Lightning Network have demonstrated that fast and reliable transactions can still be backed by an immutable ledger.
Bitcoin is stepping into a larger universe with applications we can’t even envisage in a manner it couldn’t before. More great minds will flock to the protocol as a result of the unprecedented developer freedom and structural efficiency for miners, fostering new ideas that will help the network thrive.