54% of the Bitcoin Network’s Hashrate Endorses Taproot Update

The latest scaling and privacy protocol upgrade Taproot has been supported in large part by Bitcoin mining pools. Roughly 54% of the network’s current hashrate is endorsing the upgrade, which was merged into Bitcoin Core in October. 

Four of the top five pools have sanctioned the Taproot update, with Binance Pool the only one that hasn’t to date. 

Major pools that have backed the protocol upgrade including Bitmain’s Antpool, who finally pushed the hashrate percentage in support of the upgrade past 50%. Antpool joined the four other pools that had previously backed the Taproot Activation initiative via a message sent to Poolin on Thursday morning. They will publicly voice their support in the coming days. 

The Taproot upgrade is primarily to increase smart contract functionality, improve transaction privacy, and to control the size of Bitcoin’s blocks, keeping them small while optimizing block space.

It would be a surprise now if any of the other major pools came out to oppose the Taproot update after the initial surge of support. It is still unclear how and when the update will be activated, but it’s expected to be a relatively straightforward process, causing little to no disruption. 

Lessons Learned From Segwit Upgrade

That doesn’t mean that “soft fork” upgrades such as this are without any risk at all attached. The Segwit soft fork in August 2017 was Bitcoin’s previous upgrade that, like Taproot, was designed to be backwards compatible. 

Lessons have been learned from the messy Segwit upgrade and ideally this time around miners and nodes will upgrade concurrently so that contesting factions aren’t supporting opposing versions of Bitcoin’s code. 

Demand Outweighing Supply for Mining Hardware

In related news, there has been a huge increase in demand for powerful new Bitcoin mining hardware. Major manufacturers are already selling May preorders as they are completely out of stock

The current supply shortage on the most powerful mining hardware at both Bitmain and their main rival, MicroBT, follows the price hike in Bitcoin since Q3 this year and is in part due to the limited wafer capacity from the main silicon suppliers of Bitmain and MicroBT. 

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