Miners have activated a major upgrade to the protocol. On Saturday afternoon, they finally locked in the requisite number of blocks to lock in the Taproot upgrade, a protocol that obscures complicated transactions and lowers transaction fees.
As it stands, pre-Taproot, complex Bitcoin transactions add a lot of code to the ledger and are easily identifiable. This makes it easier to track the flow of money, unnecessarily bulks out the blockchain and hikes up transaction fees. Not ideal for a privacy-focused payments network that’s short on space.
Taproot mushes complex transactions together with simple ones, making it difficult to identify the provenance of specific transactions while scrimping on data. This also lowers transaction costs for complicated transactions.
To implement the upgrade, 90% of mined blocks during a two-week window must contain a “signal” that they support the upgrade. Today, the network hit that threshold. Taproot will now go live in November.
The upgrade, proposed in 2018 by Bitcoin Core developer Gregory Maxwell, is widely considered to be one of the most important upgrades to the Bitcoin blockchain in several years. The last major upgrade was the Segregated Witness (SegWit) upgrade in 2017, which removed some transaction data to allow blocks to handle more transactions.