- If approved, Taproot and Schnorr would increase Bitcoin’s privacy and scalability via a soft fork
A Bitcoin soft fork may be coming in 2020, and it would increase Bitcoin’s privacy and scalability via Taproot and Schnorr.
Taproot makes it so all transactions on the blockchain appear the same to an outside observer no matter how complex they are. Taproot would be bundled together with Schnorr, which aggregates signatures, making Taproot possible to implement.
For example, an exchange could have a hot wallet key, a cold wallet key, and a trusted 3rd party wallet key, and these keys would be aggregated into a single Schnorr signature, which is then used to validate a Taproot output key that represents all of the involved complexities. Outside observers would only see a single output without knowing which two keys were used.
In addition to improving privacy, this reduces transaction size and fees, making Bitcoin more scalable.
It appears that Taproot and Schnorr are likely to be accepted by the community since they are so beneficial, but these upgrades still need to go through the Bitcoin Improvement Proposal (BIP) process. Therefore, it may be months until the soft fork which implements Taproot and Schnorr happens, but it appears it could happen sometime in 2020.
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