Bitcoin has just completed its first major protocol upgrade since 2017 with overwhelming consensus by miners and the community.
Taproot locked in
CNBC called it “a rare moment of consensus among stakeholders”, as the Bitcoin community needed to wait for over four years for the leading blockchain to activate another network upgrade. In 2017, the community was in disagreement on the activation of Segregated Witnesses (SegWit) and the block size limit. The divide has ultimately resulted in a chain split between Bitcoin (BTC) and Bitcoin Cash (BCH).
In order to avoid consensus issues, Taproot required a supermajority of 90% of the miners signalling their approval. This was first achieved in June 2021 and celebrated with an emotional video by Guy Swann.
WE HAVE LOCK IN! 🟩 #Bitcoin #Taproot
Video by: @TheGuySwann!https://t.co/rCUp5VNCBX pic.twitter.com/YFLMTenWW0
— Hampus Sjöberg (@hampus_s) June 12, 2021
As of block 709,632, which was mined on November 14, the network upgrade was finally activated. In order for this to happen, 90% of the last 2016 blocks needed to be created with miners signalling readiness for Taproot.
Better privacy for smart contract transactions
The network upgrade seeks to support smart contract development on the Bitcoin blockchain. Unlike other smart contract platforms, Bitcoin does not run a virtual machine that enables Turing complete smart contracts.
Instead, simple smart contracts can be developed using a script language. This makes it possible to implement complex payment logics, such as time-locks and multisig-wallets.
With Taproot activated, the scripting capabilities of the Bitcoin blockchain will now be enhanced. Additionally, the upgrade obfuscates the transaction details for smart contract payments to a degree, thus increasing the capabilities for private Bitcoin transactions.
