- Bitcoin mining pool F2Pool supports the Taproot upgrade proposal.
- As a result, the upgrade is now supported by 45% of the blockchain’s hash power.
- Once activated, Taproot should improve the privacy and efficiency of Bitcoin transactions.
F2Pool, the largest Bitcoin mining pool—that currently provides around 17% of the blockchain’s total hash power—has been listed on the “Taproot-Activation” website, signaling its support for Bitcoin’s protocol upgrade proposal Taproot.
With the addition of F2Pool, Taproot, which aims to improve the network’s privacy and efficiency, has now gained the combined support of miners responsible for 45% of Bitcoin’s hash power. This means it is just 6% away from reaching a majority.
Taproot is a protocol upgrade proposal originally developed by well-known Bitcoin contributors Greg Maxwell, Peter Wuille and Andrew Poelstra. It builds upon Schnorr signatures and Merkelized Abstract Syntax Trees (MAST) to improve the privacy, efficiency and flexibility of Bitcoin scripts.
Without delving into too many technical details, Taproot makes complex Bitcoin transactions appear as regular transfers on the blockchain.
On Bitcoin’s blockchain, scripts can be used to create one or several conditions that must be met to spend coins. One of the simplest examples of this are multi-signatures that require several parties to use their keys simultaneously to unlock certain coins. Likewise, conditions may include time-locks (that means coins can’t be spent until a certain date) or having a secret number.
Currently, these conditions are initially hidden on the blockchain and can’t be viewed by third parties. However, once the “scripted” coins are spent, all conditions associated with them are revealed for everyone—even those that haven’t been met as the coins were unlocked. This means they can be identified.
Bitcoin is the number one cryptocurrency by market cap. Image: Shutterstock.
By combining the aforementioned concepts, Taproot allows such intricate transactions to be displayed as regular ones.
Apart from privacy benefits (other users won’t ever know what the conditions were), this will reduce the computational load on the blockchain, allowing developers to write more complex scripts with minimized on-chain impact.
On their own, Schnorr signatures can only make multi-signature transactions look “normal.” The addition of Taproot, on the other hand, will expand the list of operations that can be masked this way, including closures of a Lightning Channel, atomic swaps and other contract protocols.
Taproot could also help solve Bitcoin’s scaling issues and reduce transaction fees. Currently, data-intensive scripts incur higher transaction fees for the effort it takes to execute them. Since Taproot will allow users to mask and handle them as standard Pay-to-Public-Key-Hash transactions (using just one signature), this will lead to lower fees.
As Decrypt reported, the Schnorr and Taproot proposals were implemented in Bitcoin Core on October 15—but not yet activated. It is still unclear which activation mechanism will be used for them, so it will take some time before the new code goes fully live.