ViaBTC’s View: With A Whopping 90% Yes Vote, What Will the Taproot Upgrade Bring to Bitcoin?

Schnorr Signature

The Schnorr signature technology is one of the main features of this upgrade. Satoshi Nakamoto adopted the ECDSA signature algorithm that was mature those days when Bitcoin was designed. But as the Schnorr signature technology is widely applied, the Bitcoin community began to consider replacing ECDSA with Schnorr.

Taproot vs. Tapscript

Compared with the original Bitcoin scripting logic, the Taproot structure, which is a form of the MAST (Merkel Abstract Syntax Tree) proposed by Bitcoin developers, strengthens privacy and can hide part of the script in Bitcoin transactions without revealing too many details when it is combined with the Schnorr signature technology. For example, you may identify whether a transaction uses multi-signatures at the moment, but can hardly do so under the Taproot structure.

Impact of Taproot Upgrade

The center of this upgrade is the upgrade of the signature algorithm. Schnorr signature improves the efficiency and privacy of multi-signatures. According to a Bitmex Research report, currently, about 21.5% of Bitcoins are stored in multi-signature wallets, and multi-signature have been increasingly applied.

Breakdown of BTC Stored in Addresses by Type (Data source: Bitmex Research)
Data source: https://taprootactivation.com/
Recent Changes in Hashrates of Supporting Mining Pools(Data source: btc.com)

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