Bitcoin just activated Taproot, the biggest cryptocurrency update in the past four years.
For most users, Taproot will create better privacy and anonymity in transactions. Bitcoin previously relied on the Elliptical Curve Digital Signature Algorithm, which obtains a unique signature based on your wallet key to identify who owns what. With the new upgrade, Bitcoin will introduce a second form of signatures known as Schnorr signatures, which allow larger multi-signature transactions to be unreadable, essentially creating the same level of privacy for everyone, no matter what. or the size of the transaction.
Outside of privacy, Taproot’s biggest draw is its ability to open the door to the introduction of smart contracts, or self-executing agreements, on the Bitcoin blockchain. The technology essentially eliminates intermediaries from transactions and allows them to take up less space on the blockchain and cost merchants less. “The most important thing for Taproot is … smart contracts,” said Fred Thiel, CEO of cryptocurrency mining company Marathon Digital Holdings. “It is already the main driver of innovation on the Ethereum network. Smart contracts essentially give you the ability to really build applications and businesses on the blockchain. These apps have flooded Ethereum and will soon be built on Bitcoin’s blockchain as well.
Elsewhere in tech, Discord has suspended its NFT and crypto integration following community backlash.