The required threshold has been reached to activate the Taproot upgrade, which brings greater efficiency and privacy to the smart contracts on Bitcoin.
Over the past few weeks, Bitcoin miners have signaled their support for the Taproot upgrade, and the threshold of 1,815 (or 90%) Taproot signaling blocks was reached on Friday, according to Taproot.watch.
The Taproot Soft Fork will mark the first major upgrade for Bitcoin since the implementation of Segregated Witness (SegWit) in 2017, which increased the block size limitation of the blockchain by removing signature data from Bitcoin transactions.
Taproot was originally proposed in 2018 by Bitcoin Core developer and former Blockstream CTO Gregory Maxwell, and the upgrade was supported by other prolific Bitcoin Core contributors including Rusty Russel, Pieter Wiulle, Andrew Poelstra, and Anthony Towns.
The upgrade will expand Bitcoin’s smart contract flexibility while offering better privacy.
Bitcoin currently uses Pay-to-Script hash (P2SH), whereby the blockchain initially only contains a hash (a series of numbers and letters) of the script (code that defines how coins can be spent on the next transaction).
This system has its weaknesses in that when the coins are issued, all possible conditions of the script must be exposed – not just those that were actually met. This means that there must be a lot of data in every hash and this has a negative impact on privacy.
Taproot will enable a solution called Merkelised Abstract Syntax Tree (MAST), which uses the Merkle tree data structure. This means that each output condition is hashed individually before being put into a Merkle tree, which then creates a single hash called the Merkle Root.
Not only is this process more data efficient than P2SH, but it also provides better privacy as some data can be exposed for review while the rest of the Merkle tree remains hashed and hidden.
After successful signaling, full nodes will activate the taproot soft fork at block 709.632, which is expected to arrive in November of this year.