Bitcoin November Upgrade.. Interest in Smart Contracts

[Image source=Yonhap News]

[Asia Economy Reporter Junho Hwang] Bitcoin will be upgraded this November to include smart contract functionality that enables transactions without intermediaries.

US economic channel CNBC and US economic news agency Bloomberg reported that Bitcoin miners worldwide approved the implementation of the 'Taproot' upgrade on the 12th (local time), which includes these features.

This upgrade is the first in four years and is expected to enhance security and efficiency.

First, unlike before, it will utilize the Schnorr signature scheme, which makes it difficult to determine who owns the Bitcoin. Currently, Bitcoin wallets are managed using the Elliptic Curve Digital Signature Algorithm (ECDSA), allowing only legitimate owners to use their Bitcoins. Brandon Abernathy, a former security engineer at the cryptocurrency exchange Gemini, said, "It will allow you to better hide who you are."

It is also expected that the major blockchain technology feature of 'smart contracts,' which eliminates the need for intermediaries in complex transactions, will be available. Fred Till of the cryptocurrency mining company Marrison Digital Holdings said, "The most important thing in Taproot is smart contracts," adding, "Smart contracts essentially provide opportunities to build applications and businesses based on blockchain." CNBC predicted that building smart contracts on Bitcoin's blockchain could increase Bitcoin's potential role in decentralized finance (DeFi).