What Is Bitcoin Taproot Activation and How Does It Changes Bitcoin Forever?

Essentially all bitcoins are “locked up” in scripts which is a piece of software with a couple of lines of code, that are embedded in a transaction included in the bitcoin blockchain.

This script defines how the coins can be spent in the next transaction. Spending conditions usually involve providing a signature to prove ownership of the coins. Different conditions can be mixed and matched, to create complex types of smart contracts. From 2012 these scripts which decide how the coins in consideration will be spent , are no longer publicly visible at first, only the new owner of the coins knows how they can be spent.

Pay to script hash : P2SH plays the magic here, where initially only a hash of the script is included in the blockchain. This seemingly randomly scrambled number holds the coins. When the owner spends the coins, he reveals the whole script as well as the “solution” to the script at the same time. Anyone can then use the initial hash to check that the supplied script was indeed the original script locking up the coins and can immediately conclude that the requirements of the script were met.

But P2SH script mechanism has some downfalls , what are they ?

In P2SH users who is spending the coin is still required to reveal all possible criteria that could have been met along with the criteria where condition couldn’t be satisfied , the problem lies in this approach, as it

• Firstly, Make the operation quote data intensive , as there can be multiple conditions which needs to be identified and divulged
• Secondly, it hampers data privacy . As users are required to disclose all the conditions in which the coins can be spent , everyone in the network can learn the same and can even identify what kind of wallet was used and perhaps even more, which looks scary!

MAST is our hero here, which overcomes the limitations of P2SH . Unlike P2SH, It does so by hashing all the possible conditions of fund spending individually instead of combining them into a single hash, these individual hashes are then added to Merkel tree which ultimately produces a single hash: called the Merkle root. This Merkle root “locks up” the coins.

Taproot upgrade makes use of Schnorr signature , to further hide the MAST to such an extent that people will never know that MAST-structure existed at all.

Now that we have understood two core technological changes which is slated to be incorporate in the planned Taproot activations , it is time to understand how these changes will empower bitcoin further and help it improve

In the beginning we discussed how Taproot can enhance the way bitcoin transactions operate.

As discussed already, Current bitcoin transactions without Taproot use a range of complex features, such as timelock or multi-signature. These transactions are publicly visible to everyone , but once the Taproot activations goes through successfully which we can expect to happen by the end of this year 2021. Things will change in a much bigger way

• Enhanced Privacy: Taproot will make all the transactions and multiple spending conditions into a single enhancing Bitcoins privacy to next level
• Less data to process: The data involved in transactions will be reduced thereby boosting the network efficiency
• Higher Throughput: It will support more transactions per block thereby improving the overall TPS
• Reduced Gas Fee: As the transaction will be more efficient and less data needs to be processed it will reduce the Gas fee significantly
• Mitigate Malleability : Taproot will ensure that signatures will no longer be malleable, which has been a bigger security threat in the Bitcoin network

Bitcoin has seen a lot of pain currently in the market due to sell-off triggered due to multiple concerns , largely driven by market Fuds and ESG issues. Entire May month and current week of June 2021 it is now standing on the sideline and searching for the clear direction, which most of the experts feel will continue for a few weeks or few months for that matter.

El Salvador’s adopting bitcoin as a legal tender gave a huge hope to the bitcoin community and has further strengthened the belief that this is a true store of value and most reliable inflation hedge against fiat currency . Now Taproot upgrade which promises to mitigate a few problems of security, scalability and performance is another big trigger which can set a path to long term recovery. Still we need to be patient and see what time has to answer

But i do strongly feel that :

Bitcoin is not only a crypto, it is a hope , it is a true financial freedom for common people who have been deprived of their most fundamental right of remaining self-sufficient and happy . The extreme wealth disparity on this earth has been growing from long long time , now this decentralized crypto world has given us a new platform, where it treats everyone democratically with no discrimination whatsoever .

Bitcoin is here to stay and will cross all the hurdles to change this world for betterment of one and all

Source: https://medium.com/crypto-wisdom/what-is-bitcoin-taproot-activation-and-how-does-it-changes-bitcoin-forever-e37b5f7b50f3?source=rss——-8—————–cryptocurrency