Bitcoin, the world's most valued cryptocurrency, has got its biggest upgrade in four years. The upgrade, called Taproot, is set to take effect in November this year, according to a CNBC report. Unlike the 2017 upgrade 'SegWit', which caused a “civil war” of sorts among miners because of the contentious ideological divide, Taproot has universal support from miners.

In a tweet, Alejandro De La Torre, vice president at Hong Kong-headquartered major mining pool Poolin, said, “Taproot has locked-in... Excellent work miners. Congratulations bitcoiners. Bitcoin protocol upgrade now set to activate in November."

Here's all you need to know about the upgrade:

What will the upgrade change

Bitcoin currently uses the “Elliptic Curve Digital Signature Algorithm,” which is created from the private key which controls a Bitcoin wallet and ensures that bitcoin can only be spent by the rightful owner, which means greater privacy. Taproot will switch over to something known as Schnorr signatures, which essentially makes multi-signature transactions unreadable, according to Torre.

The new upgrade will make smart contracts cheaper and smaller in terms of space they take up on the blockchain. Taproot will introduce Merkel branching (MAST) — a feature that improves the efficiency and privacy of revealing spending conditions.

The Taproot upgrade, according to experts, will bring greater transaction privacy and efficiency. Significantly, the upgrade will also unlock the potential for smart contracts — a salient feature which eliminates middlemen from transactions.

Currently, all Bitcoins have a script (conditions) which dictates how it can be used in the next transaction. For instance, a script may allow the Bitcoin owner to use them only after a certain date or a certain block height. These conditions are not publicly visible and only the owner of the Bitcoin knows them. When the coins are spent, the individual is supposed to reveal the whole script — including the conditions that were met and the ones which weren't. This makes the transaction data heavy and less private.

With Taproot bringing in the MAST technology, only those conditions will need to be revealed that are met. The others will remain hidden. This will make transactions more private and less data heavy, according to Bitcoin Magazine.

The wait till November

This time, the miners are taking time to reduce the likelihood of anything going wrong during the upgrade. Jason Deane, an analyst at Quantum Economic, while speaking to CNBC, said, "Upgrade processes are carefully tested, retested, and vetted, again and again, over very long periods of time, prior to being deployed."

In 2013, when an upgrade had gone wrong, Bitcoin was temporarily split in half. Experts say that to avoid a repeat of what happened eight years ago, “we have these extremely long lead times”.

(Edited by : Abhishek Jha)