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| Bitcoin upgrades for the first time in four years |
The first Bitcoin upgrade in four years has been approved by miners around the world. This is a rare moment when stakeholders agree.
Crypto experts say this is a very big step for the world's most popular cryptocurrency. The upgrade is called Taproot and is due to take effect in November.
When this happens, it means transactions are more private and more efficient, and most importantly, updates unlock the potential of smart contracts, which are an essential feature of blockchain technology, even in the most complex transactions.
The Taproot is important because it provides a variety of options for entrepreneurs interested in expanding the use of Bitcoin.
Unlike the Bitcoin crackdown in 2017 - which led to an ideological split - Taproot has almost universal support. This is partly because these changes are incremental improvements to the code.
Changes to Bitcoin:
Bitcoin's transformation is all about digital signatures, which you can think of as the fingerprints people leave with every transaction.
Currently, the cryptocurrency uses what is known as an oval digital signature algorithm which is generated by the private key that controls the wallet and ensures that the coin is used only by the legitimate owner.
Taproot becomes a so-called Schnorr signature, making transactions with multiple signatures illegible.
In practice, this means more privacy as your keys aren't exposed much on the chain.
This not only results in more anonymity of your personal Bitcoin address in the public blockchain, but also makes simple transactions indistinguishable from more complex transactions consisting of multiple signatures.
These backed signatures are a turning point for smart contracts, and smart contracts are protocols that work automatically. In theory, smart contracts can be used for almost any type of transaction, from paying a monthly rent to registering your car.
In terms of the space that smart contracts take up via the blockchain, Taproot always makes it cheaper.
Currently, smart contracts can be created through the Bitcoin Base Protocol layer and the Lightning Network, a Bitcoin-based payment platform that can make instant transactions.
Smart contracts executed over the Lightning Network usually result in faster and cheaper transactions. Developers started relying on the Lightning Network and eagerly awaited the upgrades that would enable very specific contracts.
Smart contracts are the most important upgrade for Taproot as smart contracts are the main driver of innovation in the Ethereum network.
Smart contracts give you the opportunity to build applications and companies on the blockchain. As more and more programmers build smart contracts on the blockchain, Bitcoin could also become more efficient in the DeFi world.
what are you waiting for:
Although the Bitcoin community has approved the upgrade, the launch itself may not happen until November. Running a large number of tests as soon as possible reduces the chance of errors during the upgrade.
The possibility of upgrading to allow system failure is minimal, which could destroy and destroy trust in the entire cryptocurrency system.
For this reason, upgrades are carefully tested, retested, and verified over a long period of time before being published.
Many people remember the disastrous turnaround of 2013 when a flawed upgrade temporarily split bitcoin in half.