For quite some time, bitcoin (BTC) miners have been able to vote on a potential major update to the Bitcoin network. The update in question is called Taproot and will include a soft fork.
Ultimately, the update should make multi-signature transactions easier on the Bitcoin blockchain. In addition, the privacy of users will be better guaranteed and it will lay the foundation for the possible rollout of smart contractscontract
For a final approval of the update by miners, 90% of the blocks in a certain period, or difficulty epoch, must give a ‘signal’. In other words, this signal includes the miners’ voice about the upcoming update. It took a long time before this 90% threshold was actually reached and this is now officially the case.
The Taproot update is a so-called soft-fork. This means that older software, without the Taproot activation, will continue to work. Nodes that have not been upgraded are strongly encouraged to validate the new software, but people don’t have to worry that their wallets will suddenly stop working.
Now that the voting round is over and the yes word has been given, a new period will begin. Not much will happen for the next five months. Behind the scenes, miners and nodes will be given the opportunity to update their software to the latest versions.
The actual activation of the much-discussed update will then take place in November of this year. All nodes that have been upgraded can then accept transactions made with the new protocol.
Ultimately, Taproot will provide a better user experience. The network will perform better and faster, privacy will be better guaranteed and multi-signature transactions will become a lot easier. All in all, a very good development for bitcoin.