The Bitcoin (BTC) network uses the Proof of Work consensus algorithm. This requires a lot of computing power from the so-called miners, who verify the Bitcoin blocks with special mining hardware. The picture shows a Bitcoin coin mechanism on a circuit board.
With today’s news we can capture a small historical moment in Bitcoin history. After long discussions about Schnorr and Taproot, the two Bitcoin Improvement Proposals (BIP) have now also been implemented in the core, namely Bitcoin Core.
If you are interested in this, you can find out more about the commit by Schnorr and Taproot on the open source platform GitHub .
Schnorr and Taproot for Bitcoin: Improvements in the network
As soon as the two Bitcoin Improvement Proposals have been activated, we can expect better transaction options and improved data protection functions.
As a reminder, the update pull request – the process by which Bitcoin developers are asked to review the code before it is fully released – was first published in September by Bitcoin developer Pieter Wuille and has been tested for over a month since then. The taproot proposal alone has been checked and validated by over 150 developers.
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What is Schnorr and Taproot? – A summary
Schnorr signatures and Taproot, formally the Bitcoin Improvement Proposals (BIP) 340 and 341, are two of the biggest changes to Bitcoin since the activation of Segregated Witness (SegWit). SegWit was an implementation that increased the block size limit of Bitcoin in 2017. Incidentally, Schorr itself is based on the SegWit mechanism.
If you are now wondering when exactly the two improvements will be activated, unfortunately we cannot make a final statement yet. Because here the following fact applies:
The activation mechanism for the three GDPs has not yet been decided. Depending on the mechanism selected, it can take some time (e.g. 1 year) until the code is activated.
Schnorr for improved data protection in the network
Schnorr is an alternative to Bitcoin’s current multi-signature wallet mechanism, which, as the name suggests, uses multiple private keys to enable a transaction from a Bitcoin wallet. However, the Schnorr update combines multiple keys into a single key when a user conducts transactions with Schnorr. This significantly reduces the data size of multisig payments and thus helps to relieve the network.
Taproot and Transaction Enhancement
Taproot continues Schnorr by introducing a new version of the transaction output as well as new options for users. In other words, this means that users can define conditions for the issue of Bitcoin. A taboo will be broken, because this will – under very specific conditions – even lead to the fact that one can regain access to lost coins.
The functions of Schnorr and Taproot are particularly helpful for more complex transaction processes and situations. Exchanges in particular, which have to process huge amounts of money and flows, benefit from the improvements.
At the end of the article we want to state an important aspect again:
Bitcoin is often criticized for being too slow and therefore not very dynamic. After all, the Bitcoin network rarely experiences major changes. Even if this is correct, this fact shows much more that the network is advancing slowly, but carefully and innovatively. You could also just call it healthy and sustainable growth.