What major changes have been brought about by Bitcoin's first major upgrade in 4 years?

On June 13, the hash rate of mining pools supporting Taproot upgrade on Bitcoin's entire network exceeded 90%, reaching the minimum requirement for lock-in upgrade, which also means that the Taproot upgrade will be officially activated in November this year. Regarded as Bitcoin’s “most ambitious upgrade” in the past few years, Taproot does represent extraordinary significance in the eyes of the industry, especially Bitcoin enthusiasts, and even “the most important of the Bitcoin protocol upgrade proposals so far. Sex once". However, compared with the Ethereum EIP 1559 proposal that has caused great industry debate, the industry voices caused by the Taproot upgrade are not loud, and many friends have not even heard of it. Then what is the Taproot upgrade? What kind of change is coming? ​ https://preview.redd.it/iad4i0f2hr671.png?width=600&format=png&auto=webp&s=d304fb806e301cf5d696300e2409aaf977bfea7b Taproot activation Bitcoin will be updated at regular intervals (soft forks of the network), and new features and information will be introduced to Bitcoin mainly in the form of Bitcoin Improvement Proposals (BIPs). The latest Taproot upgrade is a compilation of three BIPs "upgrade package", that is, the Taproot upgrade includes three parts: Schnorr signature (BIP 340), Taproot (BIP 341) and Tapscript (BIP 342): BIP340-Schnorr signature The Schnorr signature plan has long been listed on the wish list of many Bitcoin developers. As a cryptographic digital signature scheme developed by the German mathematician and cryptographer ClausSchnorr, it is mainly known for its simplicity and efficiency in generating short signatures. One of the main advantages of Schnorr signatures is that they can obtain multiple keys and generate unique signatures in complex Bitcoin transactions. This means that signatures involving multiple parties can be "aggregated" into a single Schnorr signature, so it is called an aggregate signature. So in a nutshell, Schnorr signature is mainly to save space and reduce costs, and it is also known as the biggest technological update after Bitcoin Segwit. BIP 341 — Taproot Taproot is a solution based on Schnorr signatures. It can contain complex transaction conditions and fund usage details, and then provide all these contents as a new fund usage condition (new lock) to the outside world. This new usage condition And the unlocking method (new key) under the conditions of use is supported by Schnorr's linear feature. This provides users with the ability to choose between complex arbitrary scripts and simple payment to a public key when consuming (not collecting money). In addition, key aggregation makes all Taproot output look similar. So because multi-signature output, single-signature output, and other complex smart contracts all look the same on the blockchain, many blockchain analyses will be unavailable, thereby preserving privacy for all Taproot users. BIP 342 — Tapscript BIP 342 adds and updates several opcodes, which are part of the machine language instructions that specify the operations to be performed. These new scripts help verify Taproot costs and Schnorr signatures, collectively referred to as Tapscript, which maximizes the flexibility of P2TR spending and is also conducive to future upgrades. It will improve script functions and privacy, and can help make smart contracts more efficient and private by displaying only the relevant parts of the contract when spending. In short, the core of Tarpoot's upgrade lies in Schnorr signatures, and Taproot, based on the Schnorr signature algorithm, can bring new combinations and possibilities for Bitcoin in terms of performance, privacy, and even smart contracts. Tarpoot upgrade The most important one in the Bitcoin protocol upgrade proposal As we all know, Bitcoin uses digital signatures to unlock the unspent balance in UTXO to complete the exchange. Specifically, a simple exchange can be disassembled-taking A to B as an example, the actual process can be divided into "unlock ", "Lock" two steps: Unlock: A provides his own private key and completes the unlock, thus proving that this bitcoin belongs to him and can be called; Locking: A uses B's public key to lock the bitcoin, and then transfers it to B, so that only B can use its own private key to unlock it; That is to say, Bitcoin needs to be locked with a public key and unlocked with a private key, so as to realize the transfer and exchange of encrypted currency. The public key and private key are generated through digital signature algorithm, and the Schnorr signature mentioned above is new Signature algorithm. Its most prominent feature is that it can aggregate multiple public key or multiple private key signatures into a new public key or a new signature, which can be simply understood as turning multiple locks that need to be unlocked at the same time into one lock. The bunch of keys used to unlock becomes a key. So from this perspective, the Tarpoot "upgrade package", which is regarded as the "most important one in the Bitcoin protocol upgrade proposal", may bring many changes to Bitcoin. Performance-the expansion effect similar to Rollup First of all, the improvement in performance is the most direct. Because Taproot, which is based on Schnorr signatures, can contain complex exchange conditions and details of fund usage, and then provide all these contents as a new fund usage condition (new aggregated signature lock) to the outside world. This reduces the amount of data transmitted and stored on the blockchain, making a single block contain more transactions, thereby reducing costs, and achieving a capacity expansion effect (in fact, I think it is a bit like Rollup on Ethereum). Privacy-Enhance the privacy options of the Bitcoin network Secondly, from the perspective of privacy, it will also receive the greatest blessings. Although the Schnorr signature will not make the personal Bitcoin address on the public blockchain more anonymous, it will make simple exchanges indistinguishable from those that are more complex and consist of multiple signatures. At the same time, this also allows users to cover up complex smart contracts as ordinary Bitcoin exchanges, bringing greater privacy to users. Bitcoin's "difficult payment" road The upcoming Ethereum London upgrade in July includes 5 proposals including EIP-3198, EIP-3529, EIP-3541 and EIP-3554 in addition to the highly anticipated proposal EIP-1559. Unlike the booming ecosystem where borderless innovations continue to emerge in Ethereum, Bitcoin's upgrade has always been very small. I believe that many friends have even felt that the development of Bitcoin may be at a standstill. Especially since 2020, everyone seems to have gradually acquiesced to the positioning of Bitcoin as a “digital gold”, and forgot that it once triggered heated debates in the industry, and even the payment attributes of “global currency” behind the “BCH fork”. It seems that in terms of technology applications The upgrade is not that important anymore. Lightning Network: Bitcoin capacity Just like the "Lightning Network" dedicated to Bitcoin micropayments, after nearly three and a half years of hard work, the number of locked Bitcoins finally exceeded 1,500, an increase of 42% compared to the beginning of 2021, setting a record New high, it looks like a good result. But at the same time, in the past year, the total issuance of Bitcoin pegged coins on the Ethereum chain has almost started from zero, breaking through 252,000. The Bitcoin Lightning Network has been promoting hard for several years. The fraction of "ERC20 Bitcoin" is not comparable. The Taproot upgrade can be regarded as a timely rain, strengthening the usability of Bitcoin in terms of payment performance and privacy, including the Lightning Network. If Taproot is used, the privacy of the Lightning Network can be improved by making the channel look like a regular Bitcoin exchange. Perhaps it can make up for Bitcoin's status as a "global currency", making it more advantageous in its positioning and competition with "digital gold". However, whether it is the increasing popularity of "digital gold" or "global currency" is the original intention, perhaps Bitcoin is no longer the same species as all other cryptocurrencies including Ethereum. submitted by /u/BTCqwer [link] [comments]