Taproot update… Why Bitcoin’s price has barely changed since the largest network upgrade in four years, and what might we expect from the first cryptocurrency soon? Let’s try to figure it out — read our new LATOKEN review!
On November 14, 2021, the Bitcoin network at block 709 632 activated the largest Taproot update in four years, which was proposed by Bitcoin Core developer and co-founder of Blockstream Gregory Maxwell in 2018. This update aims to improve the scalability, privacy, and efficiency of the Bitcoin network.
What is Taproot?
Before the release of Taproot, the largest update on the Bitcoin network was considered to be the Segregated Witness (SegWit) soft fork. It was activated at the end of August 2017. Thanks to SegWit, the first cryptocurrency network has reduced transaction fees and increased the block size.
Taproot is also intended to reduce fees on the Bitcoin (BTC) network by introducing multi-signature technology and implementing the Schnorr signature scheme. Until the last update, Bitcoin used digital signatures based on the ECDSA cryptographic scheme. Once Taproot is released, transactions will be able to receive multiple signatures and form a single signature. Fees for multi-signed transactions are expected to be lower because they require less data to confirm them.
With the Taproot update, the Bitcoin (BTC) network can create complex smart contracts by integrating the MAST concept. This technology allows generating separate hashes for each spend condition. Smart contracts are represented on the blockchain as regular transactions.
The role of the Taproot update in Bitcoin development. LATOKEN review
The Taproot update is definitely a fundamentally positive and important milestone. The activation of this update practically did not affect the Bitcoin quotations since this event was already included in the asset price. However, me might expect that Taproot will increase the demand for Bitcoin in the future.
But what about the competition in the crypto market? Don’t forget about altcoins. Is the Taproot update overdue? The fact is that many blockchain projects already have good scalability and transaction anonymity. Assets such as Cardano, Ethereum, Litecoin, and XRP are worth noting. They are all very effective as a means of payment.
Undoubtedly, Bitcoin fans would like the technical development of the first cryptocurrency to be more active to maintain the project’s leadership not only from a fundamental but also from a technological point of view.
Modernization and price increase
However, there is still a possibility that the Taproot update can become a key factor in Bitcoin’s growth. Let’s remember the situation in 2017, when, after activating the SegWit update, Bitcoin set an all-time high of $20,000.
The first cryptocurrency may be now repeating the patterns of previous years, which indicates a rise in the coin price. But, of course, we can’t be 100% sure.
We should also not forget about the record growth of inflation in the United States. Investors are now interested in finding an asset that will protect them from rising inflation. The current state of things strengthens Bitcoin’s position as an alternative investment asset class with positive returns.
By the way, if you want to start trading Bitcoin, you can always do it on the LATOKEN exchange!START TRADING BTC
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LATOKEN crypto exchange does not provide any investment, tax, legal, or accounting advice. This article is written for informational purposes only. Like other assets, cryptocurrency is subject to market risk. Please do your own research and trade with caution.