In a flash of unity amongst its stakeholders, Bitcoin, the first cryptocurrency and unofficial flagship token of the cryptocurrency market, has finally received its first upgrade in four years: Taproot.
Bitcoin’s Taproot is the long-awaited update that explores a system of newly unlocked applications like competitive smart contracts, increased transaction confidentiality, and even greater transactional efficiency. With the release of smart contracts on the Bitcoin network, investors will be able to eliminate the regulatory necessity of “middlemen” in peer-to-peer exchanges that have been integral to the inner workings of traditional finance. In addition, Bitcoin’s smart contracts will also create vast affordability, greater anonymity, and efficiency, thereby allowing Bitcoin to compete with the likes of Ethereum and Cardano (newer cryptos that are rapidly gaining investor interest).
As this upgrade has been incubating for some time now, Bitcoin stakeholders agreed to implement the update earlier in June 2021. Such updates are particularly tricky events as they expose the cryptocurrency system to cyber-attacks. In a recent interview Jason Deane, an analyst at Quantum Economics, told CNBC that, “Upgrades allow the – extremely remote – possibility of a bug entering the system, which would destroy confidence in the whole cryptocurrency system, effectively wiping it out – a ‘self-inflicted wound’ if you like.”
Central to the debate around whether cryptocurrency will be the catalyst that propels the world into the futuristic Web 3.0 and the next generation of monetary facilitation is the concept of “intrinsic” value. Many detractors of the DeFi (Decentralized Finance) movement argue that cryptocurrencies lack the inherent value of precious metals such as gold. While proponents of DeFi may disagree on the basis of how any asset establishes intrinsic value itself, Bitcoin’s adoption of smart contract capabilities may serve as the tipping point in this heated discussion. With tangible and revolutionary applications, the original cryptocurrency itself may be leading the charge towards a reimagined economic landscape.
