The highly anticipated technological upgrade of Bitcoin- the activation of Taproot has finally started. Bitcoin Core version 0.21.1 is now available for download. According to the document published by Bitcoin Core, an open-source project which maintains and releases Bitcoin client software, the miner block templates generated by this version of BTC will indicate readiness to execute taproot during the roughly three-month period specified by BIP341.
The document also read,
“If, during that time, 90% of blocks within a 2,016 retarget period signal readiness, taproot will be locked in and this version of Bitcoin Core will begin enforcing the additional consensus rules specified in BIPs 341 and 342 at block 709,632, which is expected in early or mid-November.”
Bitcoin’s difficulty adjustment on the 1st of May launched the first phase of activation for one of the biggest upgrades on its network after SegWit. This essentially means that the miners in the network who wants to adopt the upgrade can express their support by including special data in the blocks they mine called a “signal bit” starting from 1st of May.
If at least 90% of the blocks mined during this difficulty period of Bitcoin then the Teproot upgrade is “locked in” for activation in November 2021.
However, if the Bitcoin miners fail to lock in the upgrade by the end of the three month signaling period, a separate effort to activate it with the help of yet another mechanism would be rolled out.
The activation mechanism has been mapped out carefully. It has been designed meticulously so that, by nearly mid-August, it will either provide the participants with a guarantee that they will soon have Taproot or immediately give them important information that users and devs can leverage to make the next activation attempt more likely to succeed.
Significance of Bitcoin’s Taproot
Taproot is essentially a soft fork that enhances Bitcoin scripts. The main objective of this upgrade is not only to increase privacy but revamp other aspects related to complex transactions.
Transactions on the Bitcoin network are pseudonymous in nature. It may utilize several functionalities that make them more complex. This includes multi-signature requirements, timelock releases, etc. With Taproot out of the question, it can be easy to determine transactions that leverage these complex features by the means of creation of multiple transactions.
On the other hand, with this upgrade, Bitcoin will be able to shield those moving parts in its transactions and make it appear to be a single transaction.
First proposed by BTC Core contributor and ex-Blockstream CTO Gregory Maxwell, Taproot is expected to augment on the crypto-asset’s smart contract flexibility, while at the same time offering more privacy.