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l;dr: Bitcoin’s Taproot upgrade is the next volley.
A few weeks ago, when all of the Bitcoinerati whom I follow on Twitter were talking about the so-called “Taproot” upgrade that would be “monumental.”
Knowing that Bitcoin’s preferred development path is “slow and steady wins the race” and remembering the “block size” war of 2017, I accepted the fact that Taproot would matter. I just didn’t yet know how.
I finally had a chance to do some digging in by reading Kraken Intelligence’s great report, “Taproot Primer: An Upgrade for the Ages.”
I guess they went with the soft sell on the title, eh?
Anyway, while very technical at times, I found the document to be very accessible and comprehensible.
While there are improvements that make Bitcoin more flexible and scalable (and it’s great to see projects like seemingly get some traction to build so-called “DeFi on Bitcoin), as far as I can tell, Taproot is really about security and privacy.
Without going into all of the ins and out os signatures (not that I understand them), what this upgrade does is give Bitcoin users the option to have greater privacy of their transactions on the blockchain.
That, as far as I can tell, is the direction this whole industry is going.
On the one hand, the need to have totally trustworthy ledgers and smart contract adjudications (especially since people as adjudicators are having a rough go of it right now)
On the other hand, in the face of companies like Chainalysisncreased desire for government surveillance of financial transactions across the board, , the blockchain status quo is too revealing.
Into this void steps Taproot, which will give users the option to shield, cloak, obfuscate, or hide their transactions a bit more.
That doesn’t mean that it will increase crime (though I suppose that’s possible), what I think it means is that we are continuing down the path of “privacy by default/privacy first” society (or at least a key segment of society) vs. the “data aggregators have everything there is to know about you and are willing to sell it.”
Or, in the case of Apple, “we know everything there is to know about you, but will just use it for ourselves” (see here for more on marketing industry response.)
Regardless, Taproot is a big upgrade and it’s about meeting the needs of a segment of the population (growing?) that wants the trust of a blockchain without making it easy for other people to snoop on them.
