Bitcoin a Step Closer to Taproot, the Biggest Upgrade Since SegWit
World's most popular cryptocurrency, Bitcoin (BTC), is one step closer to seeing it's largest change since 2017.
Developer and Bitcoin Core contributor Pieter Wuille, has submitted a "pull request," which lets others know that a code change is ready for reviews, discussions, suggestions, etc. by the community, in order to add more commits if needed, and get the changes ready to be merged into the base branch upon a decision to do so. The pull request concerns a significant code change that is designed to increase privacy of the coin, called Taproot.
"What is taproot? Trying to make all output scripts and most spends indistinguishable," said Wuille. As previously reported, Taproot soft fork comes together with more upgrades, complementary to each other. There are three BIPs (Bitcoin Improvement Proposals) encompassed by this proposal, and have been officially named BIPs 340, 341, and 342.
The Schnorr/Taproot proposal is now published as BIPs 340, 341, and 342; see https://t.co/33uiulO8RA— Pieter Wuille (@pwuille) January 24, 2020
Note that the assignment of BIP numbers is not any kind of stamp of approval; it just means the process was followed (which includes some amount of public discussion).
The upgrade includes a soft fork called Schnorr, which not only helps protect privacy, but it increases scalability and speed. Combined with Taproot, Schnorr would allow signature data to be mashed together, thus encoding multiple keys into a single one. What happens is that Taproot utilizes Schnor and adds smart contract capabilities to BTC, therefore ensuring better privacy. If the soft fork happens and the combination of these two is introduced, Bitcoin users’ advanced payments would be hidden and complex payments would seem like any other normal transaction. It would generally be more difficult for outsiders to figure out what's happening within a transaction and what any particular user is doing.
"Merging this is obviously conditional on getting community support for the proposal. It's opened here to demonstrate the code changes that it would imply," writes Wuille. This is a major step on the long path of an upgrade to become official and could potentially be the biggest one after the addition of Segregated Witness (SegWit) first activated in 2017 on the Litecoin and then on the Bitcoin networks. Bitcoin's activation of SegWit increased network transaction speeds and decreased transaction fees, while the Lightning Network continues its developments, making transactions faster.
So far it seems that Taproot will not cause as many disagreements within the community as SegWit did. The response has already been largely positive, while a number of developers have reviewed the proposal and made comments on it. Bitcoin Core contributor Anthony Towns announced in November 2019 that a group of more than 160 participants will be reviewing Taproot with the goal for each to either find major issues that need be fixed, or OK the formalization of the drafts and move towards implementation/deployment phases. Those who have provided feedback have "ACKed" the proposal, meaning "go ahead and move to the next stage."
However, it's not clear when Taproot might be implemented.
At pixel time (12:16 UTC), BTC trades at c. USD 8,410 and is almost unchanged in a day. The price is down 5% in a week.