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Entrepreneur
Kurra Bewarse
Username: Entrepreneur

Post Number: 3588
Registered: 05-2011

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Posted on Sunday, June 13, 2021 - 2:17 pm:   

Bitcoin just got its first makeover in four years, which will help it compete with Ethereum

The first bitcoin upgrade in four years has just been approved by miners around the world. It’s called Taproot, and it’s due to take effect in November.

The upgrade will mean greater transaction privacy and efficiency – and crucially, it will unlock the potential for smart contracts, a key feature of its blockchain technology.

1.“Taproot matters, because it opens a breadth of opportunity for entrepreneurs interested in expanding bitcoin’s utility,” said Alyse Killeen, Founder and Managing Partner of bitcoin-focused venture firm Stillmark.

2. Right now, the cryptocurrency uses something called the “Elliptic Curve Digital Signature Algorithm,” which is created from the private key which controls a bitcoin wallet and ensures that bitcoin can only be spent by the rightful owner. Taproot will switch over to something known as Schnorr signatures, which essentially makes multi-signature transactions unreadable, according to Alejandro De La Torre, Vice President at Hong Kong-headquartered major mining pool Poolin

3.In practice, that means greater privacy, because your keys won’t have as much exposure on the chain. “You can kind of hide who you are a little bit better, which is good,” said Brandon Arvanaghi, previously a security engineer at crypto exchange Gemini.

4. Alyse Killeen, Founder and Managing Partner of bitcoin-focused venture firm Stillmark.

A>Taproot makes smart contracts cheaper and smaller, in terms of the space they take up on the blockchain. Killeen says that this enhanced functionality and efficiency presents “mind blowing potential.”

B>“Lightning transactions can be fractions of a penny...while a bitcoin transaction at the core protocol layer can be much more expensive than that,” explained Killeen.

5. “The most important thing for Taproot is...smart contracts,” said Fred Thiel, CEO of cryptocurrency mining specialist Marathon Digital Holdings. “It’s already the primary driver of innovation on the ethereum network. Smart contracts essentially give you the opportunity to really build applications and businesses on the blockchain.”

6.“You don’t want different clients or miners in the protocol out of sync. That’s how catastrophic stuff happens,” Nic Carter, founding partner at Castle Island Ventures, told CNBC. “Because we don’t want a repeat of 2013, we have these extremely long lead times.”

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