New Proposal Might Increase Bitcoin’s Competitiveness
New Bitcoin Improvement Proposals (BIPs), revealed by developer Pieter Wuille, might bring the most popular cryptocurrency to another upgrade and make it more private and scalable.
Firstly, according to the BIPs, Taproot is introduced, which is a code change that is designed to increase privacy of the coin. With this code, all transactions on the blockchain look the same to outsiders, which would basically mean that one user’s transaction would be indistinguishable from another’s. What this means also is that Taproot would hide Bitcoin users’ advanced payments, so that any complex payment would seem like any other, mundane one.
However, Taproot will likely not come alone. To accomplish a lot of what’s been said, this code needs to be bundled together with an upgrade called Schnorr. This is a soft fork that developers have been working on for years. Schnorr is relevant, since it furthers the already utilized technologies that are protecting users’ privacy, but would also assist scalability improvements to Bitcoin, and increase speed. Together with Taproot, this upgrade would allow signature data to be mashed together into one, and with it, encoding multiple keys into a single key.
Because there are quite a few changes to the cryptocurrency that have been discussed over the years, bitcoin might be rolling them all out in a bundle. This would include the Merkelized Abstract Syntax Trees (MAST). This upgrade improves privacy and scalability as it makes complicated smart contracts become very small in size, that way reducing demand on block space. Furthermore, as only a small part of the smart contact is actually revealed to the public blockchain, it becomes more difficult to analyze, while the users’ privacy is increased.
It’s relevant to note that all these technical details are made available to the public, so that any developer in the community can voice out their agreement or disagreement with the changes, and the vote of the community decides on whether the changes will eventually be implemented or not.
Wuille also said in a BIP, that “While many other ideas exist, not everything is incorporated. This includes several ideas that can be implemented separately without loss of effectiveness.”
Meanwhile, Bitcoin’s activation of the Segregated Witness (SegWit) upgrade in August 2017, has brought an increase in network transaction speeds and lower transaction fees, while the Lightning Network continues its developments, making transactions faster and more convenient.
Interestingly, in April of this year, Bitcoin Cash announced an update for May 15th, which includes Schnorr signatures.