The Taproot update is expected to be launched on the Bitcoin protocol by November 2021.
In fact, along with Taproot, Schnorr signatures will also be released which will raise the level of privacy of the Bitcoin protocol.
Bitcoin is a protocol that is rarely updated, because it is always very difficult to make changes to a truly decentralized network, so that even the timing of the release of Taproot is particularly long.
For example, this update was proposed as late as January 2018, and only in October 2020 was it integrated into the Bitcoin Core library.
Furthermore, despite the fact that the Speedy Trial was launched at the beginning of May, it will still take weeks, if not months, before the update can become operational.
First, at least 90% of the blocks of an epoch of difficulty must contain the signal bit that shows the miners’ acceptance of the new rules, and right now that threshold is still a long way off. However, almost 50% of blocks now contain the signal bit, so it is likely that the 90% threshold will be reached sooner or later.
The impact of the Taproot update on Bitcoin
Taproot is a highly anticipated soft fork, and one that has already been widely supported, because in conjunction with Schnorr’s signatures it improves Bitcoin’s privacy, scalability, and security. It could also generate more interest in the Lightning Network, the leading scaling solution for Bitcoin which is still sadly largely underused.
Taproot will change the way Bitcoin scripts operate, allowing all moving parts of a complex transaction to be obscured. That is, these transactions, which can contain many other transactions, will be recorded on the blockchain as a single transaction, preserving the privacy of the transactions included in it and reducing their byte weight, and therefore cost.
In essence, this update will make it possible to completely hide the execution of a script, so as to make the various types of transactions indistinguishable, such as the opening of a Lightning Network channel or the registration of a sophisticated smart contract. However, the public addresses of senders and recipients remain visible.
Eventually, thanks to Taproot and Schnorr signatures, the amount of data to be recorded on the Bitcoin blockchain can be reduced, the number of transactions that can be included in a block can be increased, transaction costs can be reduced, and the different transaction types can be hidden.
However, it must be stressed that only the Lightning Network can really significantly expand the number of transactions that can be handled by the Bitcoin network, while also drastically reducing transaction costs. However, Lightning Network has already been active for some time and is therefore already available to users.