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Friday, January 27, 2023

Taproot Gaining Momentum

Bitcoin Core developers have long been working on a solution that would bring privacy and smart contracts to the world’s most popular cryptocurrency. The Taproot improvement proposal (BIP) was first introduced in 2018, but it wasn’t until late April 2019 that the Bitcoin network finally activated the code for Taproot.

Taproot is a soft fork that adds enhanced smart contract capabilities to Bitcoin and allows for the creation of new kinds of Bitcoin transactions that can be used in place by existing applications. It also helps secure privacy by providing additional cryptographic signatures over certain types of data.

Taproot On The Move

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To understand Taproot’s importance, it helps to first understand how it came about. After years of work on various privacy enhancements proposals like Confidential Transactions (CTs) and CoinJoin, a group called Project Maxwell presented its plans for what would eventually become Taproot in 2015 at Scaling Bitcoin Montreal (SBM). At SBM 2017, developers from several different projects collaborated together to create a reference implementation for Taproot (called “Segregated Witness” or SegWit) that was released as part of Bitcoin Core v0.16 in December 2018 — with activation occurring just weeks later on Feb 6th 2019 after having been delayed due to network congestion issues earlier that month

The Taproot proposal was initially conceived as a way to unlock the potential of smart contracts, but it has since turned into something else entirely: a solution for Bitcoin transactions that are not private. The original idea was to add privacy features to Bitcoin transactions by using a technique called “zero-knowledge proofs” (ZKPs). A ZKP allows participants in a transaction to prove they know something without revealing what they know. In addition, ZKPs are useful because they allow people who want their transaction data kept private (for whatever reason) to do so without impacting their ability to use smart contracts or other blockchain applications that require proof of identity.

However, Taproot doesn’t actually include any privacy features itself; instead, it enables users with common names like “Alice” and “John” to convert those names into addresses like “[email protected]” and “[email protected]” These addresses then act as placeholders for actual identities necessary for smart contracts or other blockchain applications requiring proof of identity — meaning only those involved in the transaction will ever know who exactly is behind an address label such as [email protected] or [email protected] (or even which label corresponds with which person).

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