The Bitcoin Network (BTC) successfully activated the Taproot soft fork after 90% blocked the consensus of miners and mining pools between blocks 709488 and 709632. The feat marks the first major update to Bitcoin since August 2017, when the leading Bitcoin solution by tier was launched, Lightning Network and Segregated Witness (SegWit).
The Taproot update aims to improve the scripting and privacy features of the Bitcoin network. To do this, the soft fork introduces the concept of Merkelized Abstract Structure Tree (MAST). According to the website dedicated to Taproot, popular bitcoin developer Hampus Sjöberg:
“[MAST] can only help make smart contracts more efficient and confidential by exposing the relevant parts of the contract when it is used.”
Speaking to Cointelegraph, Sjöberg noted that taproot activation shows that Bitcoin can refresh the network again, which is very important for the life of the Bitcoin network. “I think this is the biggest victory,” he added.
Sjöberg, who is also the developer of Blixt Wallet for Bitcoin Lightning, believes that the Taproot update allows you to explore off-chain features without putting too much pressure on Bitcoin nodes on the network.
In addition, Sjöberg believes that MAST can also help improve privacy for the legacy Lightning network “if Lightning apps decide to use Taproot.” Developers of various applications of the Lightning Network node met in Zurich, Switzerland just a few weeks ago at the LN Summit 2021 to discuss possible upgrade paths:
“One of the things that was discussed at the meeting was whether it would be better to update Lightning in small iterations or do it in one big package.”
Sjöberg also explained how, under normal circumstances, payment channels cannot be separated from normal transactions using Taproot for the Lightning Network:
“There is no way to know if a Taproot transaction is a regular payment or if it belongs to the Lightning Channel. This is important for the exchange and therefore resistance to Bitcoin censorship.
The successful activation of Taproot is associated with Speedy Trial, a Soft fork distribution method that requires 90% of miners to indicate the update distribution. As explained by Sjöberg, “The signaling method works during the 2016 ban periods, which means that during the 2016 ban period, 90% or 1,815 blocks of 2016 should signal emergency preparedness.”
Back in June 2021, Bitcoin miners reached a 90% consensus for the first time, and Schauberg tweeted an announcement:
However, the Taproot update also marks the end of the Speedy Trial distribution, and future updates to the Bitcoin network will require adaptation to the new soft fork distribution methods. “Taproot opens up a world of possibilities, but the first thing I want to see in person is the MuSig 2 transaction. Sharing tips for other bitcoin developers,” Sjöberg said:
While we shouldn’t take anything for granted in Bitcoin, I personally would like to see Signature Cross Entry Aggregation as a future soft fork of Bitcoin.
Related: Bitcoin Lightning Nodes and Channels Reach Record Highs
During the nearly 13 years of Bitcoin’s existence, the Bitcoin network has undergone a series of hard and soft forks initiated by the community. While the Taproot update has yet to prove its worth anytime soon, the Lightning Network continues to reach new heights.
On September 28, the Lightning Network saw a 160% increase in the number of nodes over 12 months, as well as a 170% increase in the number of channels as of January 2021.
As of November 11, the capacity of the Bitcoin network before the Taproot soft fork was an all-time high of 3,220 BTC, which was roughly $210 million.