The first bitcoin upgrade in four years has just been approved by miners around the world.
The upgrade is called Taproot, and it’s due to take effect in November.
Right now, the cryptocurrency uses something called the “Elliptic Curve Digital Signature Algorithm,” which is created from the private key which controls a bitcoin wallet and ensures that bitcoin can only be spent by the rightful owner.
In practice, that means greater privacy, because your keys won’t have as much exposure on the chain.
These souped-up signatures are also a game changer for smart contracts, which are self-executing agreements that live on the blockchain.
Currently, smart contracts can be created both on bitcoin’s core protocol layer and on the Lightning Network, a payments platform built on bitcoin, which enables instant transactions.
“You don’t want different clients or miners in the protocol out of sync.