New BIP uses Taproot to improve Bitcoin transaction privacy

Key facts:
  • Taproot has already been blocked on Bitcoin, and will be active by November of this year.

  • BIP will obfuscate transactions from a single signature to make them unrecognizable.

A new Bitcoin improvement proposal (BIP) proposes to improve privacy in Taproot transactions of a single signature, allowing them to be masked so that it is impossible to recognize them between multifirm operations or contract protocols.

The proposal was uploaded in recent days to the Bitcon-Dev mailing list by programmer Chris Belcher. In it, it is proposed to create a system that uses the time lock system nSequence by default in Taproot transactions, this to increase the privacy of operations.

nSequence is a time-blocking protocol on transactions, which states that a transaction will block funds until a certain block height is not reached or no set amount of time elapses from its creation.

With nSequence you can create programmable transactions for future payments. Originally this was done through Bitcoin Script, the original language of Bitcoin Core. However, with the arrival of Taproot and the Sapio programming language, the way is opened for the development of smart contracts by integrating the properties of nSequence.

Time-locked transactions have already wreaked havoc on the Bitcoin network, due to flaws in its programming, a fact reported by CriptoNoticias at the time.

However, the motivation to make Taproot transactions using nSequense a standard is to avoid attacks called fee sniping. These occur when a rogue miner attempts to mine two blocks simultaneously, thus staying with the block that has the most commissions.

With time-locked transactions, this type of practice is avoided, considering that malicious miners could have a greater motivation to carry out this type of attack in the future halving, as the commissions collected by a block will be higher than the BTC reward mined. This reward stands at 6.5 BTC and on average one block generates 0.2 BTC in commission charges.

It should be noted that the implementation of nSequense does not require any kind of soft or hard fork, since it can be adopted independently by the different Bitcoin wallets, as it suits them.

Taproot and smart contracts

Smart contracts are perhaps a concept closely linked to Ethereum, as Ethereum has exploited its use hand in hand with its own programming language Solidity, which facilitates its development. But Bitcoin was no stranger to them, as it has its own programming language Bitcoin Script, which in theory allows the creation of smart contracts, although they are quite difficult to program.

Conceptual scheme of the operation of an intelligent contact developed in Sapio by its creator Jeremy Rubin. Its function was to define the date on which Taproot would be activated. Source: Bitmex.

With the arrival of Taproot and Schnorr firms to Bitcoin, the horizon opens up to smart contracts on the mother cryptocurrency network. This through a scripted programming language named Sapio, of which several models have already been presented in Bitcoin.

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