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On November 14, 2021, bitcoin miners and mining pools reached a 90% lock-in consensus between the Bitcoin network block heights 709488 and 709632, and successfully activated the Taproot soft fork upgrade at around 05:15 UTC. This upgrade is a successor to Bitcoin's another major upgrade, SegWit, in August 2017.
What is the Taproot Upgrade?
The Taproot upgrade is a technical upgrade to improve the functionality and privacy of Bitcoin network. It was first proposed by Bitcoin core developer Greg Maxwell. The upgrade includes three proposals (BIP340, BIP341, and BIP342), and was released in June 2021. On Nov 12th, with the support of more than 90% of miners and mining pools, the upgrade was approved and locked in for November.
The Taproot upgrade introduces Schnorr signatures and MAST (Merkel Abstract Syntax Tree) data structure in the Bitcoin network. This upgrade can effectively enhance the efficiency and privacy of the Bitcoin network, especially in the Lightning Network.
Source: Wikipedia (Claus Schnorr)
Schnorr is an aggregation signature algorithm, proposed by German mathematician and cryptographer Claus Schnorr. It is superior to and compatible with existing digital signature methods in terms of performance, security, size, and scalability. In the Bitcoin network transactions, when multiple private keys need to be used for multiple signatures, Schnorr can aggregate these signatures into a single-signature private key. This method not only saves network space, but also greatly reduces transaction costs and Improved efficiency.
In the proposal BIP341, a new online payment method based on the characteristics of Schnorr's aggregated signature is proposed-Pay-to-Taproot (P2TR), which uses the MAST (Merkel Abstract Syntax Tree) data structure.
MAST is a cryptographic method that can hash multiple data elements into a hash value. In the Bitcoin transaction process, whether it is a multi-signature, a single signature, or a more complex smart contract signature, the output path of these transactions on the Bitcoin chain can look like an ordinary transaction through MAST, which is further protected. The privacy of traders is improved.
What benefits does the Taproot upgrade bring to Bitcoin?
Greatly reduce the data volume of some complex transactions and reduce transaction costs.
By introducing Schnorr aggregate signature and MAST privacy and efficiency, some complex transactions look no different from ordinary transactions.
Scalability and Security Improvement
The introduction of Schnorr aggregate signature and MAST reduces the size of the multi-signature space, thereby reducing the amount of data on the chain, and effectively improving the scalability and security of the Bitcoin network.
In the 13 years since Bitcoin was born and gradually grown, the Bitcoin network has experienced many community-driven hard and soft forks. Although the Taproot upgrade is only an optimization of Bitcoin's cryptographic technology, the value of this upgrade and its impact on the price of Bitcoin have not yet been proven, but it is undoubtedly an important milestone in the history of Bitcoin. Helping Bitcoin play a vital role in the process of becoming a mature blockchain platform.
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