Turquoise vertical bar on bitcoin's price chart highlights the price impact of the SegWit upgrade in 2017. A month later, when the upgrade went live, the price of bitcoin had climbed 50%, to a then-astounding $4,247 on Aug. The development of the Lightning Network since 2017 is what allowed it to become a linchpin of El Salvador’s push to make bitcoin legal tender alongside the U.S.
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This step allowed more transactions to be processed without increasing the size of individual data blocks.Īnother key feature of the 2017 upgrade was the enabling of the Lightning Network, a secondary layer built on top of the Bitcoin base layer, which facilitates near-instantaneous, free and more private bitcoin transactions. The 2017 upgrade that introduced SegWit improved Bitcoin’s scalability by “segregating” specific data from individual transactions, effectively making them smaller. If history were a guide, the upgrade could usher in big gains. “Competing coins do a lot of futuristic marketing about what might happen in five years,” he said. There is a pipeline of change and it’s large, but it has a slow release schedule because it needs testing.”Īccording to Back, “People get impatient because it has been a year since they heard about it in the press.” “People mistake the lengthy rigorous quality assurance as a lack of change. “This is a false story that people make, that Bitcoin is not developing very fast,” Back said. Developers have been preparing for the Taproot upgrade since 2018, the year after the Segregated Witness, or “SegWit,” upgrade went through. “The risk is the market will see it as being something that is already available elsewhere,” said Vinokourov.Īdam Back, CEO of Blockstream, and a protocol researcher, told CoinDesk in an interview that despite the infrequency of upgrades, hordes of developers are constantly working on network improvements in the background. He said the Taproot implementation is likely to have a limited impact on the cryptocurrency’s price because the upgrade has been widely expected for years. “Some may argue that bitcoin’s lack of upgrades shows its technical superiority over Ethereum,” said Denis Vinokourov, head of research at Synergia Capital.
Given the rapid pace of development in the blockchain industry, four years without a major upgrade can seem like eons. Is Taproot good for bitcoin?īackers of Bitcoin say the slow-going approach simply shows how methodical and cautious its developers are – wary of doing anything that might hurt a revolutionary blockchain network that has defied most expectations since its introduction 12 years ago.īut some investors have grown more skeptical of the Bitcoin network’s ability to adapt and expand, worried that its first-mover advantage might be eroding. 2 blockchain, just off the heels of its London hard fork in August and now pushing forward with its “Ethereum 2.0″ overhaul expected next year, has seen the price of ether, its native cryptocurrency, quintuple this year. Yet, the episode is serving to highlight a key difference in Bitcoin’s approach to network improvements versus competing blockchains where upgrades and tweaks are far more common. “This is a revolutionary moment for Bitcoin,” said Don Guo, CEO of Broctagon Fintech Group. Smart contracts have been a key feature of the rival Ethereum network, powering fast growth in decentralized finance (DeFi) applications that aim to automate many functions of banks and trading firms. 16, the Taproot upgrade is designed to increase privacy protections on some transactions over the network through an innovation known as “Schnorr signatures.” The upgrade also will allow for more lightweight “smart contracts” – essentially programs stored on a blockchain that run when certain conditions are met.