Since its origin, no one has been able to stop the growth of bitcoin. It became one of the fastest-growing aspects of investment in today’s tough economic times. Bitcoin was the reason why more people were attracted to the financial world of investing. However, the high prices associated with crypto certainly raised eyebrows in terms of caution before investing. There is no doubt that the field is growing and association with it could lead to high returns in terms of monetary aspects, however, a deep dive into something that involves a significant amount of money would always be done with having an idea of the holistic picture.
Bitcoin’s journey – Look at any crypto blog on the internet regarding bitcoin – they will all mention the name of a mystery man – Satoshi Nakamoto, who seemingly came up with the idea of Bitcoin. The concept of this coin was launched in 2008 and it is the largest and the oldest digital currency that exists in the market. Bitcoin has always been the top contender among all the coins that continue to exist and it has witnessed some dramatic highs and lows in its journey. Since the supply is limited, there has always been a scramble and a great demand to purchase this cryptocurrency no matter its value. In January 2022, only around 2.1 million Bitcoins were left in the mining process. It is predicted that as the supply becomes even more scarce, the demand and value of this coin will increase.
Interesting evolutions – The ever-evolving technological network of bitcoin has made the field increasingly popular among investors yet again. Since the development of many faster networks in terms of transaction speed and fees, the aura around BTCs were diminishing ever-so-slightly. Therefore, various peripheral platforms took charge to improve the overall scalability and functionality of the blockchain.
- Stacks – Stacks serve as an independent layer-1 blockchain mechanism that is connected to the base layer of bitcoin. It uses the consensus mechanism proof-of-transfer (PoX). The foundation of the project is dependent on the secure and un-interfering structure that bitcoin is based on. The project will allow venturing into a host of other assets like NFTs, DeFis, smart contracts, etc. In other words, stacks would allow the development of applications beyond bitcoin and its original network without any major changes to the base network.
- Taproot – The bitcoin taproot upgrade is another significant development in the sector. Bitmain Technologies Ltd. is one of the largest bitcoin mining companies in China and it has developed a new version of the bitcoin protocol – named taproot. This upgrade works by keeping the current version working and intact until the predicted upgrade and update are complete. This would allow access to the new upgrade to the users as and when it happens only if they wish for it.
Advantages of the taproot upgrade – The installation of this system aimed to cut down on the previous grievances that the Bitcoin users seemed to have with the network. The several advantages associated with this upgrade are:
- Faster transactions – Many altcoins were able to surpass bitcoin’s transaction speed. This was because each signature in the bitcoin transaction needed to be validated against a public key. This additional process was an extra safety measure, however, it was time-consuming and caused high network traffic resulting in a delay in the transactions and increased transaction fees as well.
- The original network has a peer-to-peer transfer verification system in place which did not allow privacy for the users.
- The transparency of the bitcoin network could be a boon and a bane. Since any user could gain access to the transactions, it could potentially increase the chances of hacking. This upgrade creates a security blanket around the network as it makes simple transactions indistinguishable from complex ones. People who do not have access to the private key will find it tough to gain access to the information of the transfers.
- Overall, the bitcoin network is envisioned to become safer, more private, and scalable. It would be an improvement to the original blockchain that bitcoin works on. Making it more accessible for decentralized finance and smart contracts to work on. It also reduces the miner fees while increasing overall security against hackers.
The world of bitcoin is still alluring. Its nuances have made it an even better network to be a part of as the investors stand to gain a lot from the upgrade. Create an online or hardware wallet and invest in bitcoins.