Bitcoin has just had its first makeover after 4 turbulent years

This is a rare time when stakeholders reach consensus on Bitcoin's technology. Crypto experts emphasized that this upgrade will play a big role for the future of cryptocurrencies. An upgrade called Taproot will take effect this November.

When Taproot is introduced, it will improve privacy as well as transaction efficiency. In particular, it will open up the potential for smart contracts, an important feature of blockchain technology that eliminates the middleman from the most complex transactions.

Alyse Killeen, a cryptocurrency expert, said: ' Taproot is important because it creates a lot of room for people interested in Bitcoin extensions .'

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Unlike the 2017 upgrade, which was met with intense controversy among Bitcoin fans, this upgrade received widespread support. Believers all see benefits when Bitcoin improves.

This makeover of Bitcoin has a lot to do with digital signatures, which can be seen as the fingerprints that each individual leaves on every transaction they make. Currently, Bitcoins possess technology that only allows their owners to transact. With Taproot, however, Bitcoin will work with undisclosed multi-signature transactions.

This not only provides greater privacy, but it also helps in the execution of complex transactions. Called smart contracts, the agreements will be self-executing with blockchain technology and the main payment tool, Bitcoin. In theory, smart contracts could fit anything from paying rent to registering a car.

Taproot makes smart contracts smaller and cheaper, in terms of the space they take up on the blockchain. As it becomes more ubiquitous, bitcoin may gain more traction in the world of decentralized finance, a term used to describe financial applications designed to eliminate middlemen.

While the Bitcoin community has agreed to the upgrade, the rollout won't happen until November. Thorough testing prior to the upgrade will help limit problems during the "makeover".

Experts also say that the upgrade process is always fraught with risks, which can destroy trust in cryptocurrencies. That's why mistakes can cost so much. It is impossible to be cautious, especially with a highly volatile asset like Bitcoin.

In 2013, the upgrade was causing errors with Bitcoin, causing the digital currency to be temporarily split in half. " You don't want customers or miners to operate in an asynchronous protocol. This has happened before. So, to minimize the risk, we need enough time. long to test the changes, " shared Nic Carter, founding partner at Castle Island Ventures.

After many turbulent weeks, the price of Bitcoin on the afternoon of June 14 fluctuated around the $39,000 mark. Although it is far from the peak of $65,000 set in April, the Bitcoin price is recovering quite strongly from the bottom a few days ago.

Kareem Winters

Update 15 June 2021