Bitcoin to get more privacy features in Taproot update, making it harder to trace payments
- The bitcoin network has approved a new update called Taproot to enhance privacy for users, which some say could change the way payments and derivatives are made
- Proponents hope the update will make the bitcoin network friendlier to developers, as the more feature-rich Ethereum network has remained more attractive
Bitcoin is gaining more privacy features as concern increases over the use of the cryptocurrency during a recent spate of ransomware attacks.
The most significant update in four years to the computer software that underpins the world’s largest digital token was approved this past weekend with little fanfare. In past years, fights among the groups known as miners who run the network were characterised as a civil war and led to offshoots such as Bitcoin Cash.
While the main advance makes the network easier to use for certain big embedded applications called smart contracts, the so-called Taproot update could also let more people use privacy wallets and services that make it harder to figure out who paid whom. That could enhance the anonymity features prized by advocates of the currency, which law enforcement says is often used for illicit purposes. The US has recently linked cyberattacks against Colonial Pipeline Co. and meat producer JBS SA to groups in Russia that used the cryptocurrency.
“Things will be less fingerprintable – which use-case or wallet they are,” Adam Back, chief executive officer of crypto services developer Blockstream, which helped code Taproot, said in an interview.
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Proponents of bitcoin, who have long called the taint of illicit use overblown, said the changes could improve how payments to hundreds of people are sent, or how crypto derivatives or bets are made on the network.
Today, the vast majority of smart-contract applications are being built elsewhere, on networks like Ethereum. Taproot won’t quite make bitcoin a direct competitor to the most-used crypto network; Ethereum has more developer activity and features, and is easier to use. But it’s a step in that direction, and it could make bitcoin more attractive to more users and developers.
