Coinbase (NASDAQ), a leading cryptocurrency exchange, has announced that its users can now send Bitcoin (BTC) to Taproot addresses, enhancing access to various on-chain destinations and improving the overall user experience associated with the significant Bitcoin upgrade.
In a recent tweet, Coinbase stated, “We’re pleased to announce that Coinbase users can now send Bitcoin to Taproot addresses, creating access to more on-chain destinations.”
The Taproot upgrade, implemented in November 2021, was designed to enhance the privacy, efficiency, and smart contract capabilities of the Bitcoin network. Taproot addresses, also known as Bech32m addresses, begin with “bc1p” and leverage Schnorr signatures for improved transaction confidentiality and efficiency. However, it is important to note that not all wallets currently support Bech32m format.
Despite the advantages of Taproot, many exchanges have yet to adopt support for these addresses, limiting users’ ability to fully leverage the upgrade. By enabling Bitcoin transfers to Taproot addresses, Coinbase positions itself in alignment with the evolving Bitcoin ecosystem.
The Taproot upgrade, which achieved a 90% consensus among Bitcoin miners before its launch, incorporates three key Bitcoin Improvement Proposals (BIPs): BIP340 (Schnorr Signatures), BIP341 (Taproot), and BIP342 (Tapscript). This upgrade enhances Bitcoin’s transaction programming language, enabling developers to implement future updates more efficiently.
While Taproot was rolled out nearly three years ago, its complete impact may take time to unfold as more service providers adopt the technology. The full benefits of the Taproot upgrade are anticipated to be realized in the coming years as the ecosystem continues to evolve.
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