Bitcoin: Are you ready for Taproot? Decentralization in action!
Bitcoin is about to make another history. Taproot, a soft-fork to the Bitcoin network is going to become reality in less than 30 minutes or about 3 blocks away. This will not be an important upgrade to the network but also a demonstration of decentralized way of coming to consensus about monetary policy.
Taproot will bring features like smart contracts, privacy, and cheaper transactions to Bitcoin network. While these all sound awesome, I am not here to talk about technical implementation of code changes. But rather my focus is of broader nature, and of importance of decentralized systems and how they offer a better system to conduct our finances and store wealth.
Bitcoin has not seen an upgrade since Segwit was introduced back in 2017. It was a controversial topic and had influence on creation of a bitcoin fork in the form of bitcoin cash, aka b-cash.
I have heard about Taproot a few months ago, maybe a year ago. Now we are very close to activating it. In order for Taproot to be adopted miners had to signal that they are in favor of these changes. Correct me if I a wrong, I believe the threshold to adopt Taproot is/was 90%. This is huge. Miners all over the world from various geographical, political, cultural backgrounds with various financial interest had to review and approve this change. If 90% didn't agree on this change it wouldn't happen.
We can see big difference already in comparison how traditional and centralized financial institutions like central banks operate. Central banks operate in a very private and secretive manner with some level collusion with governments they are located at. There is almost no transparency of how they conduct their monetary policy. Most often public finds out after the fact. But most importantly stakeholders, in other words those who hold the currencies have zero say on these policies.
Now with decentralized systems like Bitcoin, there is full transparency of intended changes. There are many brilliant software engineers who dedicate their precious time and skills in exploring new options, sharing them with the public, and propose changes. Even when they have no power to make changes themselves to the network.
Then miners share their insights, review the code, and decide if it is something beneficial to implement for bitcoin and for themselves. There is significant amount of money involved and miners are among the ones who would suffer from damages if anything went wrong. So it is in their best interest to put in the best effort in considering any sort or hard fork changes.
At the same time all of the stakeholders in Bitcoin network, large and small have a say in a public forum, discuss the changes, and analyze pros and cons. It is an amazing to see decentralization in action.
Yes, technical aspects of these changes are important. But I don't have to worry about them when there is a global community of great minds investigating every single detail, exposing corrupt intentions, and praising the great achievements. Being a stakeholder in Bitcoin is like employing global hub of geniuses for free.
What are your thoughts about Taproot, decentralization, and bitcoin? Is it a million dollar yet? :)
Not a financial advice. But bitcoin has proven time and time over that it will always goes back to its previous all time high price. If it is lower than the previous all time high price then it probably is undervalued.
Well, by the time I started and finished the post, Taproot has already been activated. See at taproot.watch.
Congratulations on Taproot for all bitcoin hodlers!
Posted Using LeoFinance Beta