Bitcoin is the cryptocurrency with the largest market capitalisation in the world. It is an impressive, extensive decentralised network powered by the most advanced technological solutions. Bitcoin’s most powerful upgrade launched at the end of 2021. Its codename is Taproot.

Bitcoin Taproot Upgrade Tasks

Despite its leading role in the global cryptocurrency market, it is vital for the Bitcoin network to keep pace with its competitors in terms of key metrics. A big focus of the project team is to:

• reducing fees;
• increasing transaction speed;
• privacy and reducing the number of intermediaries;
• potential scalability.

These were the main objectives of the Taproot fork. A lot of work has been done. It took no less than 3 years from idea to implementation.

How the Bitcoin Taproot solves the tasks

1. The “Schnorr Signature Algorithm”

The Schnorr Signature algorithm has been implemented in bitcoin. It provides greater transaction confidentiality and also extends the capabilities of multi-signature wallets. The algorithm gives the option of forming a single signature from many. Less data is required to validate a multi-signature transfer. Consequently, transaction fees are lower and the speed is higher.

In addition, the mechanism for implementing smart contracts has changed. They have become cheaper and more compressed in terms of space on the blockchain. And they are more confidential.

2. Implementation of MAST

The MAST concept, integrated after the updаte, enabled the creation of complex smart contracts. It is now possible to generate individual hashes for each spending condition.

Previously, in order to dispose of their digital asset, the users had to confirm that they were the true owner. Thus, during multi-signature transactions, the transfer information automatically became available on the bitcoin blockchain.

The introduction of MAST, instead of full details, allows only completed transaction conditions to be recorded on the blockchain. This provides greater privacy for users.

*The need to protect personal data and minimize the risk of fraud and hacking is almost a primary concern for all crypto projects. AnyExchange cryptocurrency exchanger pays great attention to this. The website has an SSL certificate, AML service, and all the necessary security guidelines.

What is the importance of the Taproot updаte

Taproot has given Bitcoin a strong impetus to scale further in terms of marketing and technological improvements. Reduced user concerns in terms of keeping their personal data, excessive transaction times and high fees.

To what extent has it helped stabilise the virtual asset, which analysts call “digital gold“, in the current market environment? Time will tell.