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- Published: June 19, 2021 19:12
New Delhi: Bitcoin, the world’s most popular cryptocurrency is set to undergo first makeover in last 4 years after receiving consensus from majority of stakeholders and experts. ‘Taproot upgrade’, as has been named, will come into effect from November this year. Experts believe this marks a revolutionary moment for the world’s biggest digital currency.
What will change after Taproot upgrade?
Over the years, several new cryptocurrencies have launched in the market with advanced technology, however, Bitcoin despite being the oldest adopter of blockchain was in crying need for a makeover.
Till date, cryptocurrency uses something called the “Elliptic Curve Digital Signature Algorithm,” which means bitcoin can be spent by the rightful owner only. Taproot will switch over to Schnorr signatures, which will enable multi-signature transactions unreadable. This means the crypto will get additional security and privacy features.
According to Sathvik Vishwanath, co-founder and CEO, Unocoin, this upgrade has two sides. “On the first side, it is expected to bring in better privacy and transparency in transaction, and on the other side, this is the first time the smart contracts capability is being added to the bitcoin blockchain network.”
“These features are already available in other different coins and as it has been a successful experiment in them so far, it is even getting copied in bitcoin, which is the world’s popular and widely spread cryptocurrency,” he said.
Why the need for Taproot upgrade ?
After going through Taproot upgrade, Bitcoins would allow smart contracts to be run efficiently and cheaply. Till now, the smart contracts are running ethereum network due to lack of its own network. But, after this upgrade, Bitcoin will have the potential to elevate itself and integrate with mainstream finance. Moreover, blockchain visibility has lately been a concern as others can keep a watch on your transactions. This upgrade will make the transactions more secret.
What does Taproot upgrade mean for investors?
Not much will change after the upgrade. The major objective behind Taproot upgrade has been make the world’s oldest and largest crypto more competitive with current cryptos. Also, this will make the crypto more user-friendly, enhance its ease of usage and these features will lure more investors.
The movement in the price of cryptocurrencies depends on the practical use cases of the digital asset that are adopted by the masses.
“Bitcoin’s Taproot upgrade might just be the key element that would propel it into mainstream finance. The bottom line is the kind of revolution that the Taproot upgrade might bring for Bitcoin is phenomenal,” said Edul Patel, CEO and co-founder, Mudrex.
Overall, the new Taproot upgrade will increase privacy features in the Bitcoin, making it harder to trace payments. For users, it comes as a welcome move while the anonymity feature could be another strain for law enforcement agencies because of its rampant use for illicit purposes.