Benefit Of Taproot Bitcoin Smart Contract Usage
Several Bitcoin developers agree that Taproot will offer a significant improvement in Bitcoinâs privacy. In a conversation with Cointelegraph earlier in June, Pieter Wuille, Bitcoin developer at Chaincode and one of the earliest proponents of the Taproot upgrade, remarked:
âIt [Taproot] extends Bitcoinâs script capabilities in ways that make certain things cheaper (especially more complex applications like multisig and layer-two things), and somewhat more private by often hiding what the exact spending rules were.â
Apart from masking certain spending conditions and making transactions indistinguishable, Taproot also offers a significant reduction in the block space occupied by transaction data. While this feature will reduce transaction throughput by compressing the data size associated with multisig transactions, it is hardly a panacea to Bitcoinâs scalability issues.
However, it opens the door for smart contracts on the Bitcoin blockchain since the upgrade already lessens the amount of space needed for multisig transactions in a block. Smart contract transactions by nature involve interactions among several addresses and users.
With Taproot, these smart contract operations will not appear to be any different from a simple wallet-to-wallet BTC transfer. Detailing some of the likely smart contract use cases that could emerge once Taproot is activated later in 2021, Casatta told Cointelegraph:
âIn the middle/long term, I see an increase in Bitcoin smart contract usage, enabling use cases like inheritance and delegation in company spendings. And the best part is that, by looking at the blockchain, we will not know about that.â
Many Bitcoin developers agree that beyond the November activation, network participants will need to create useful applications based on the upgrade. The upgrade itself will activate according to the terms in Bitcoin Improvement Protocol 341 (BIP-341) at block height 709,632.
Taproot will be a soft-fork upgrade, meaning that network participants are not bound to adopt the change. However, given the likely fee advantages offered by the upgrade, service providers are likely to update their software to implement Taproot.
https://cointelegraph.com/news/bitcoin-taproot-locked-in-to-improve-privacy-and-introduce-smart-contracts