Posted: 27.07.2021 | 03:19
What is Taproot?
What is Taproot?
Despite the fluctuations in the crypto market, Bitcoin has proven to be the mainstay that keeps the crypto world intact. Mt. Gox attack and the notorious Bitcoin hard forks, the crypto community has maintained its support and faith in Bitcoin.
But there are certain issues that cannot be ignored. One of the most important of these is security. Since Bitcoin is a public blockchain, all transactions made on the network can be tracked by anyone. For some segments, this poses a major problem.
Anonymity can be increased by using various techniques. Unfortunately, none of these can and will not make Bitcoin a secret currency. While the same is true for Taproot, this upgrade is an important alternative that can help increase the anonymity of the network. The Taproot upgrade is anticipated by many as the first step towards solving Bitcoin's lack of privacy and other related problems. So, what is Taproot and how will it contribute to Bitcoin?
What is Taproot?
Taproot can be defined as a soft fork that will increase the privacy of Bitcoin's scripts and improve other factors related to complex transactions. Transactions on the Bitcoin network can become more complex using time-locked releases, multi-signature requirements, and the like.
Without Taproot, multiple processes using these complex functions that require the creation of multiple processes are capable of being specified by anyone. The Taproot upgrade is intended to make it possible to "hide" all the moving parts of a Bitcoin transaction containing these available features. All these transactions will appear as a single transaction even if it has these properties. This innovation has a huge plus and importance for those who advocate privacy in Bitcoin.
In fact, Taproot also makes it possible to hide that a Bitcoin script is running. For example, spending Bitcoin using Taproot could render the transaction undetectable in a Lightning Network channel, peer-to-peer transaction, or sophisticated smart contract. Anyone who watches any of these transactions will see nothing but peer-to-peer transactions. However, it should be noted that this will not have any impact on the visibility of the wallets of the original sender and final recipient.
Taproot's spawn proposal was originally created by Bitcoin Core developer Greg Maxwell in January 2018. Following the pull request created by Pieter Wuille, Taproot has merged with the Bitcoin core library as of October 2020 and node operators are required to adopt Taproot's new consensus rules for the upgrade to be fully operational. Depending on how this process will proceed, activation may take months. The upgrade, called Taproot's Schnorr signatures, is expected to be implemented. This will not only enable Taproot to be implemented, but also enable a much-requested feature called signature merging.
What are Schnorr Signatures?
Schnorr signatures include the cryptographic signature scheme developed by the German mathematician and cryptographer Claus Schnorr. Although Schnorr protected his algorithm for years by patenting it, this patent expired in 2008. Among the many advantages it offers, Schnorr signatures are best known for their simplicity and ability to create short signatures.
The signature scheme favored and adopted by Satoshi Nakamoto (the creator of Bitcoin) is the Elliptic Curve Digital Signature Algorithm (ECDSA). The reason why ECDSA was chosen instead of Schnorr signature algorithm is that this algorithm is now widely used, secure, compact, well-known and open source. But the development of the Schnorr Digital Signature Scheme (SDSS) could be the starting point for the creation of the next generation of signatures in Bitcoin and other blockchain networks. One of the main advantages of Schnorr signatures is the ability to take multiple keys within a complex Bitcoin transaction and create a single unique signature. This means that the signatures of more than one party involved in the transaction can be “collected” in a single Schnorr signature. This is called signature collection.
How Taproot Can Benefit Bitcoin?
As described earlier, Taproot is known and expected to make significant improvements to Bitcoin's privacy. When combined with Schnorr signatures, Taproot can significantly increase throughput while performing transactions. Along with increased privacy, it will be able to offer certain potential advantages. Some of these advantages are respectively;
- First, it reduces the amount of information to be transferred and stored on the blockchain.
- Also, more transactions per block (higher TPS rate),
- And finally, lower transaction fees.