contract: Bitcoin Taproot potential impact and price predictions

contract: Bitcoin Taproot potential impact and price predictions

< Show Wisdom Collection: Bitcoin Taproot potential impact and price predictionsarticle avatarFrederico de Abreu

Research and Development

What economic and financial impact would Taproot have on the crypto market till the end of 2022 and how the bitcoin price will be affected?

If all goes according to schedule, in the third Quarter of 2021, a new light will start to shine on Bitcoin and its Blockchain, with the Taproot soft-fork that will enable Smart-Contract capability and a bigger privacy based set of rules. The Schnorr signatures will allow for a more concealable way of transacting, in which a single user will be indistinguishable from a group of users. Allowing this way for a Complex Bitcoin transaction, that contain multiple key to be arranged in to a single Schnorr signature, that will reduce considerably the amount of data transferred and stored in the Blockchain. Another key aspect is the removal of Malleable signatures. Once a transaction is signed, it can not be removed or changed, even if the transaction is still undergoing confirmation time. The Smart-Contract is the way that Bitcoin will continue to maintain adaptability and dominance in a market it first served as foundation stone. Making the way clear, for a number of institutions that hold Bitcoin in their portfolio, to deploy their services to an ever-growing range of adopters of the cryptocurrency. Overall, Bitcoin will benefit in full as the new set of rules will bring a better utility for the Blockchain itself, other than transacting cryptocurrency on a P2P base. Sources: https://bitcointaproot.cc/ https://www.nasdaq.com/articles/taproot-activation-brings-massive-upgrades-to-bitcoin-2021-06-12 https://academy.binance.com/en/articles/what-is-taproot-and-how-it-will-benefit-bitcoin https://www.cnbc.com/2021/06/12/bitcoin-taproot-upgrade-what-it-means.html

article avatarVision N

Full Stack Developer / Crypto / Blockchain

What economic and financial impact would Taproot have on the crypto market till the end of 2022 and how the bitcoin price will be affected?

First of all, a major upgrade of the Bitcoin blockchain was done four years back. Now, the Bitcoin Taproot upgrade is highly anticipated and expected to come into existence from coming November. Most of the Bitcoin miners agree to support this upgrade; hence, the consensus has been already achieved as it is the first and biggest public blockchain network. Taproot upgrade has two important points to consider: 1)This upgrade will enable better privacy and transparency in transaction 2) For the first time, the Bitcoin blockchain will be supporting the smart contract feature after this upgrade It is expected, Taproot upgrade will allow users to use the smart contract feature cheaply and effectively in the Bitcoin blockchain network and that will inspire them to implement the real-world applications into the Bitcoin blockchain network. IMHO, it will impact the price of Bitcoin and the crypto world due to the following reasons: 1)If use-cases of Bitcoin increase, its demands will also get increased, and hence, the price of BTC will also increase. 2)Taproot upgrade will get adopted by mainstream finance that will inspire mass adoption. 3)Transaction cost will be lowered due to the reduced data size of BTC transaction 4)More flexibility in the Bitcoin blockchain network.

article avatarTony Kunz

Founder | Innovator | Advisor | Decentralized Business Consultant

What economic and financial impact would Taproot have on the crypto market till the end of 2022 and how the bitcoin price will be affected?

Taproot will be a very impactful change to the Bitcoin ecosystem especially because till now many Bitcoin folk have been content with the primary application of exchange of value. By making the Bitcoin Blockchain support smart contracts natively and given the massive uptake the exciting possibility is the ready market for smart contract services, however the token limit of 21 million becomes something to pay attention to as with smart contracts the volume of transactions will go up exponentially impacting transaction fees. it is not inconceivable Bitcoin may have to transition away from it's current PoW model and possibly it's 21 million limit. However this will bring more interesting challenges as hardliners have been adamant that that limit be retained.

article avatarKarthikeyan Ramachandran

Business Analyst /Blockchain Enthusiast

What economic and financial impact would Taproot have on the crypto market till the end of 2022 and how the bitcoin price will be affected?

Taproot was first proposed by Gregory Maxwell of Blockstream and how schnorr MAST and taproot are interconnected is technically explained in the article https://bitcoinmagazine.com/technical/taproot-coming-what-it-and-how-it-will-benefit-bitcoin In short, Taproot helps in reducing the size of the Bitcoins transaction thereby helps with more transactions per block which mean increased TPS and decreased fees. Also once Taproot is enabled, the size of a multiparty transaction would be the same as normal transactions, it will allow the smart contract functionality to get developed on the Bitcoin network. So what would be the economic or financial impact? The simple answer is huge. The current usage of Bitcoin in DEFI is negligible. Even USDT issued in Omni protocol has fallen behind the USDT issuance on ETH and TRX. With multiple Uniswap variants getting developed ETH, BSC has pushed bitcoin to a side actor in DEFI field. So Taproot functionality can unblock the Bitcoin Usage and helps in DEX and DEFI apps getting created on the Bitcoin network itself . We need to note that wBTC issued in ETH itself worth 6B in market cap. Lightning Network can act as the second layer as how Polygon is helping Ethereum in reducing fees and block congestion. So the DEFI can shift towards Bitcoin, being the leading cryptocurrency in market cap and held by the most crypto believers, once Taproot and Graftroot are completely implemented.

article avatarnoe tsertsvadze

Mechanic

What economic and financial impact would Taproot have on the crypto market till the end of 2022 and how the bitcoin price will be affected?

Taproot is a soft fork that improves Bitcoin’s scripts to increase privacy and improve upon other factors related to complex transactions.In fact, Taproot makes it possible to hide the fact that a Bitcoin script ran at all. For example, spending Bitcoin using Taproot could make a transaction in a Lightning Network channel, a peer-to-peer transaction, or a sophisticated smart contract become indistinguishable.the upgrade is called Taproot, and it's due to take effect in November. When it does, it will mean greater transaction privacy and efficiency – and crucially, it will unlock the potential for smart contracts, a key feature of its blockchain technology which eliminates middlemen from even the most complex transactions

article avatarJohn Granofsky

Director of Sales

What economic and financial impact would Taproot have on the crypto market till the end of 2022 and how the bitcoin price will be affected?

Widespread Taproot adoption could address some of Bitcoin's most glaring negatives, and that is the lack of privacy when it comes to BTC transactions as well as increased block transactions per second. Most importantly, the addition of a smart contract protocol will lead to more applications being built on BTC vs ETH. This would help with large scale adaption of BTC as a currency and not merely a store of value, and increase its utility among DApp developers. BTC price over the long term should benefit from these improvements, though in the short term price predictions are largely meaningless because of its volatility.

This is not a financial advice. Please do your own research and consider the risks of trading cryptocurrencies.

Experience Experty at its fullest

Join to unleash the power of crypto wisdom and never feel FOMO again.

Sign up