Major crypto exchange Coinbase (NASDAQ:COIN) has officially announced that its users can now send Bitcoin (BTC) to Taproot addresses, expanding access to more on-chain destinations and improving the overall user experience for those leveraging the major Bitcoin upgrade.
“We’re pleased to announce that Coinbase․com users can now send Bitcoin to Taproot addresses, creating access to more onchain destinations,” Coinbase wrote in a recent tweet.
Taproot, an upgrade implemented in November 2021, aimed to improve the privacy, efficiency and smart contract capabilities of the Bitcoin network.
A Taproot address, also known as a Bech32m address, is a unique Bitcoin address format that begins with “bc1p” and originates from Bitcoin’s Taproot update, which includes Schnorr signatures. While these addresses improve transaction secrecy and efficiency, not all wallets support Bech32m.
Support for Taproot addresses is also yet to be adopted by many exchanges, leaving users unable to fully utilize the benefits of the upgrade. Coinbase’s decision to allow Bitcoin transfers to Taproot addresses aligns it with the evolving Bitcoin ecosystem.
Bitcoin taproot upgrade three years on
The Taproot upgrade went live in November 2021, following a 90% consensus among Bitcoin miners.
The Taproot upgrade contained three Bitcoin Improvement Proposals (BIPs): BIP340 (Schnorr Signatures), BIP341 (Taproot) and BIP342 (Tapscript).
Taproot provides Bitcoin with an upgraded transaction programming language that incorporates Schnorr and Taproot technology. This enables developers to deploy future Bitcoin updates more efficiently.
While the Taproot update was implemented about three years ago, its full impact may take some time to be realized. The impact of this upgrade is expected to be fully actualized in the coming years, when more service providers adopt the technology.
