As a seasoned crypto investor with a penchant for staying ahead of the curve, I find Coinbase’s latest update to enable Bitcoin transactions to Taproot addresses truly exciting. With my roots firmly planted in this digital soil since the early days of Satoshi Nakamoto, I can attest that such developments not only enhance privacy and scalability but also pave the way for a more robust and versatile Bitcoin network.
On October 8th, Coinbase is set to roll out an important update that allows users to transfer Bitcoin directly to Taproot addresses.
By integrating this system, we’re making Taproot easier to use for more people, improving its confidentiality, efficiency, and safety. Now, with their recent addition of support, Coinbase is part of the group of leading cryptocurrency exchanges including Binance, OKX, and Kraken.
In its tweet, the crypto exchange stated,
Exciting news! Users of Coinbase.com are now able to transfer Bitcoin to Taproot addresses, expanding the variety of places they can deposit their Bitcoin on the blockchain.
In 2018, Bitcoin developer Greg Maxwell first put forth the idea of Taproot. Subsequently, another Bitcoin developer named Pieter Wuille took it further by formally implementing the update.
Initiated in November 2021, garnering 90% support from Bitcoin miners, the Taproot update was implemented as a soft fork, ensuring continuity with previous Bitcoin software versions without causing the disruptive effects of a hard fork. This upgrade encompasses three Bitcoin Improvement Proposals: BIP340 (Schnorr Signatures), BIP341 (Taproot), and BIP342 (Tapscript). These proposals aim to enhance privacy, optimize efficiency, and expand smart contract functionalities on the Bitcoin network.
Despite initially having a gradual acceptance rate, CryptoQuant CEO Ki Young Ju highlighted a substantial surge in Taproot utilization during January. This increase saw the usage rise from just 1% to an impressive 39% over the course of a year.
Besides streamlining transactions, Taproot’s capability to handle sophisticated smart contracts has paved the way for inventions like BRC-20 and Runes, digital tokens native to Bitcoin. Additionally, it significantly contributed to the development of Ordinals, a system that permits inscribing unique data on Bitcoin, similar to how NFTs function on other blockchains.
In simple terms, the cost for conducting transactions in Bitcoin overtook Ethereum‘s transaction costs in November 2023, primarily as a result of Bitcoin Ordinals. On November 20th specifically, the typical Bitcoin transaction fee stood at $10.34, which was higher than Ethereum’s average fee of $8.43 at that time. The data for this comparison comes from BitInfoChart.
As a researcher, I’ve observed that the recent upgrade has fueled the emergence of innovative Taproot-centric ventures, including Taproot Wizards and Tap Protocol. These entities are dedicated to the development and expansion of the Bitcoin Ordinals ecosystem.
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2024-10-09 14:56