Taproot, the most significant improvement to Bitcoin’s protocol in years, now has enough mining support to lock in activation.
According to the parameters set forward by “Speedy Trial,” if at least 90% of the blocks mined in any of the designated 2-week difficulty periods “signal” their support for the upgrade, then the activation process can begin. To be more precise: 1,815 out of 2,016 blocks mined within a period have to include a little piece of encoded information that indicates that the miner who mined that block is in favor of the upgrade.
During this second difficulty period, at block 687284, that benchmark was met. By the time that the difficulty period ends on Sunday, it is likely that Taproot will have locked in with over 99% of blocks signalling decisively in its favor.
Taproot is Bitcoin’s most anticipated upgrade since Segregated Witness (SegWit) in 2017. Whereas the main focus of SegWit was scaling the Bitcoin protocol, Taproot will outfit Bitcoin with a new signature scheme known as Schnorr signatures. This small adjustment to the Bitcoin code opens up new possibilities for privacy, multisignature wallets and security, as well as scaling.
Now that the threshold has been met, the end of this difficulty period on Sunday will mark the completion of the first phase of Speedy Trial.
Speedy Trial is the process that the Bitcoin community of developers and stakeholders agreed to use to determine if there was enough support from the miners to go ahead with the Taproot soft fork. For months, even once it was clear that there was widespread support for the upgrade, there was still debate as to how it would be implemented.
Any alteration to Bitcoin’s code require consensus; there is no one person or entity “in charge” that can unilaterally make those changes. Arriving at that consensus can sometimes be even more complicated than writing the code itself. In the case of Taproot, Speedy Trial, devised by David Harding and Russell O’Connor, was the solution that got the most community support.
Now that the Taproot soft fork upgrades are “locked in,” the next phase of activation is basically a 5-month waiting period. During this time, miners and nodes will have ample opportunity to update their software to Bitcoin Core 0.21.1, the newest version of Bitcoin Core that contains activation logic for the Taproot soft fork (and some other improvements).
Finally, in November, when Bitcoin reaches a specified “block height” (Bitcoin block 709,632), Taproot will activate; that is, the Bitcoin Improvement Proposals (BIPs) relevant to Taproot and contained in Bitcoin Core 0.21.1, will automatically kick in. At that point, all upgraded nodes and devices will be able to recognize and accept transactions made using that upgraded protocol.
From there, it will be up to developers in the Bitcoin ecosystem to make use of the tools that Taproot brings to the table, specifically Schnorr signatures which will replace Bitcoin’s current elliptic curve digital signature algorithm (ECDSA).
These smaller and faster Schnorr signatures also have the added benefit of being “linear,” a combination that will boost Bitcoin’s transaction privacy and allow for more lightweight and complex “smart contracts” (an encoded contract with self-executing rules).
In the long run, Taproot’s tooling and coding improvements will translate to a better user experience for bitcoiners in terms of overall performance, as well as privacy improvements to multisignature (multisig) technology, privacy software and even scaling tech like the Lightning Network.