peer-to-peer spend to one that involves many different parties, time requirements, or potentially event-based conditions. In essence this means greater privacy for the network, more user capabilities, and - again - smaller and cheaper transactions because a complex transaction will end up looking identical to a simple A→ B transaction.
While the efficiency and privacy gains to Bitcoin Core are certainly exciting, we find the long-term effects of Taproot will largely relate to capabilities in technology layers built on top of Bitcoin - such as the Lightning Network. Although the impact of Taproot on Lightning and the broader ecosystem are mostly theoretical at this stage and require some deeper technical knowledge. But! If you’re interested to learn more, check out some of these more advanced resources:
Now that we understand a bit about how Bitcoin changes and why Taproot is seen as an overall benefit, let's dive into activation and what has happened since.
Taproot activated as expected on November 14th 2021 at block height 709,632. This was a planned upgrade at which point users would voluntarily participate (or not). Essentially this means those that opted for Taproot could start utilizing its new type of transaction anytime within or after block as of block number 709,632 and those that did not could remain fully compatible making payments on the same Bitcoin blockchain as if nothing happened (remember our “human in a coma”). The activation was successful in that it occurred at the intended time without any unanticipated results and the network continued without downtime or a chain split.
While we find the Taproot activation was a successful event and much less dramatic than SegWit2x, it was not perfect. There were some speed bumps in the mining of taproot blocks by two mining pools who had signaled their readiness for the upgrade prior to actual activation on the network. This means that some people announced to the network they were ready for Taproot before the network was prepared to verify taproot transactions. This was resolved somewhat quickly as they each had mined blocks with Taproot transactions by block 710,494, or within five days of activation.
All in all, we find Taproot to be an overwhelmingly positive change to Bitcoin that we will continue to discuss in later editions of this newsletter. By the way, if you feel we missed anything, please reach out to email@example.com so we can improve and relay such info in future editions. And if you want to continue these conversations, hit us up on Twitter or Telegram!