Bitcoin to get major facelift after four years in November

Bitcoin's new upgrade 'Taproot' has received overwhelming support from miners around the world and is set to take effect from November, CNBC reported.

The new upgrade would mean greater transaction privacy and efficiency which would enable smart contracts, a feature of the blockchain technology which eliminates the need for middlemen.

Taproot is the first and the most anticipated update since the last one 'Segregated Witness (SegWit)' in 2017. While the main focus of SegWit was scaling the Bitcoin protocol, Taproot will equip Bitcoin with a new signature scheme known as Schnorr signatures.

Currently, Bitcoin uses the "Elliptic Curve Digital Signature Algorithm," which is created from the private key that secures the Bitcoin wallet and ensures that it is only used by its owner.

On the other hand, Taproot will switch to Schnorr signatures which is multi-signature transactions unreadable, the report said citing Alejandro De La Torre, Vice President at Hong Kong-headquartered major mining pool Poolin.

"You can kind of hide who you are a little bit better, which is good,"  Brandon Arvanaghi, previously a security engineer at crypto exchange Gemini told the publication.

This would allow greater anonymity for an individual bitcoin address on the public blockchain, but it will make simple transactions indistinguishable from those that are more complex and comprised of multiple signatures, the report added.

The new upgrade will also allow smart contracts cheaper along with taking up lesser space on the blockchain. "The most important thing for Taproot is...smart contracts," said Fred Thiel, CEO of cryptocurrency mining specialist Marathon Digital Holdings. "It’s already the primary driver of innovation on the ethereum network. Smart contracts essentially give you the opportunity to really build applications and businesses on the blockchain."

The upgrade would take about five months as it requires a lot of testing before being fully integrated into the system.