You might have heard of the Bitcoin taproot upgrade and you may be wondering how that it’s going to affect Ethereum if it enables smart contracts. You also might be wondering how much better the taproot upgrade will be.
- Ethereum is touring complete and can run forever, while Bitcoin is non-touring complete and can’t.
- Bitcoin has more brand recognition, while Ethereum doesn’t.
- Bitcoin will probably have higher transaction fees.
Keep reading and I’ll also share 6 reasons how Taproot will make bitcoin “Better.” I’ll also share why this upgrade is happening!
Changing of the Bitcoin
Apart from the price, Bitcoin is sort of boring right? It doesn’t sing, dance, or do tricks! All it does is store value, but the positive of this is its trustworthiness.
Then in 2017, Bitcoin grew in popularity and the community was split on how to update it. Should it be BIG blocks or small blocks and the small blocks won.
This created a hard fork and Bitcoin Cash was born. The problem was the update created lots of “Drama” in the community and people are nervous about ANY changes.
What is good about Taproot is that it has “a lot” of support from the community.
This update “Taproot” does have 90% support from the people that create the blocks “the miners.”
90% is a VERY big number. Imagine if 90% of people would vote for 1 political candidate right? Also, if 90% of the miners support the update “there has to be something good about it.”
You also might be wondering when Taproot will come out and it will be in November 2021.
Taproot Vs Ethereum!
You might be wondering how Taproot will be different from Ethereum. The main difference is Bitcoins Taproot upgrade is it’s non-touring complete, while Ethereum is touring complete.
Ethereum can “run forever,” while Bitcoins taproot “can’t.”
You could say non-touring complete” is more specialized while touring complete is a multi-purpose tool that can do everything.
Reminds me of the saying…
A jack of all trades is a master of none!
The main problem with touring complete is security flaws. This was proven with the DOA attack that happened where almost 50 million dollars was almost stolen. This led to Ethereum Classic being born.
You can read more about the attack from this link HERE.
The security flaws are NOT good. This is why the project I “really” like Defi Chain was built on Bitcoin. Bitcoin is MORE stable and secure. I think it’s the ONLY Defi project built on Bitcoin, I don’t know of any other.
You can learn more about Defi Chain from the link HERE!
You don’t want to build a house on the sand right?
The second difference between the 2 is just branding. Bitcoin has brand recognition and the price is WAY higher than Ethereum. Everyone has heard of Bitcoin! Not as many people know what Ethereum is!
It reminds me of another saying I like about publicity!
You can say anything about me as long as you spell my name right!
Due to this branding, Bitcoin will probably grab smart contract business away from Ethereum. Nobody wants to be on the second-best network, people have egos and their prestige.
The third difference is going to be transfer fees. At the time of this blog post, it’s generally going to be cheaper to send Ethereum than Bitcoin.
When Ethereum 2.0 comes the price will be even lower. With Bitcoin, there is a limit of 21 million Bitcoin and 19 million have already been mined.
Bitcoin will be coming out with the lighting network and this is a layer 2 network that runs on top of Bitcoin. All the transactions are off-chain but have all the security of Bitcoin.
The interesting thing is the transactions are NOT public because they happen off-chain. Bitcoin will probably be more expensive to send than Ethereum.
It’s almost like Bitcoin is the “Grey Goose” of Vodka, while Ethereum is like “Absolute!” Bitcoin will probably be more expensive, but be higher quality and more secure.
The 6 Benefits of Taproot?
One of the BIG changes with Taproot is that it’s going to help with scalability. Basically, it’s going to make transactions faster by shrinking the size of the data.
You could relate it to putting a file in a zip folder and sending it.
Can you guess another benefit to shrinking the data size? It’s going to reduce the energy consumption of the network.
Less energy use is good because this has been 1 of the criticism of Bitcoin. Even Elon Musk tweeted about it!
Another benefit of Taproot is that it will lower the transaction fees of Bitcoin. The taproot upgrade is going to have Shnorr signatures and they are 12% smaller in size, this means more transactions will be included in each block.
The transaction fees of bitcoin are based on supply and demand, what the upgrade does is increase the supply and thus reducing the price.
Nobody knows exactly how much of a reduction in price this will be, but it will probably lower it.
The fourth benefit of Taproot is that it’s going to make future Bitcoin upgrades easier by simplifying Bitcoins scripting language.
The fifth benefit that taproot will have is it will improve privacy.
The last benefit is that it will have smart contracts. This is “by far” the biggest. I “really” think this is a GREAT idea because even if only a few people use it, it’s an option.
The use of smart contracts drew me to Ethereum first, but it’s hard to ignore Bitcoin!
Conclusion
I’m trying to be unbiased, but I feel Bitcoin’s Taproot does have an advantage over Ethereum. The one LARGE advantage that Ethereum does have is a head start when it comes to Dapps and smart contracts.
I still don’t think that makes up for branding! Also, even if Bitcoin seems more secure that is going to push developers over to it.
In the end, anything can happen, and I look forward to learning about how both of these players will do in the future!
I do think it’s a smart decision to compete with Ethereum with smart contracts. I would have voted for the Taproot upgrade if I were a miner as well.
I hope this blog post on Bitcoin Taproot vs. Ethereum was helpful to you. Bye for now.