Bitcoin (BTC) received last Sunday (14) a new update called Taproot, considered the most important upgrade of cryptocurrency. The novelty should offer more privacy and security in blockchain network transactions, in addition to making it cheaper and expanding the possibility of using smart contracts.
Mining block 709,632 enabled the introduction of Schnorr signatures, which make complex transactions with multiple signatures look normal, making them look like any other transaction. This makes it difficult for eavesdroppers or would-be hackers to track larger or unusual transactions.
Schnorr subscriptions also increase efficiency. By allowing the combination of three public keys, these signatures reduce the need for computational resources to process operations. As a result, transactions will be cheaper to process, leading to lower fee costs.
One of the main differences between Bitcoin and Ethereum (ETH) is their suitability for smart contracts. These digital agreements written in code and stored in blockchain are essential for driving decentralized finance (DeFi) and non-fungible tokens (NFTs).
Compared to ETH, Bitcoin has historically been much more limited to accommodate smart contracts. However, even though BTC is likely never as flexible as Ethereum from a smart contract standpoint, with Taproot this gap will now narrow.
Schnorr subscriptions can enable BTC users to execute more complex smart contracts than before. This will likely lead to an increase in daily Bitcoin applications.