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A release date and activation timeline are set for Bitcoins Taproot upgrade, but developers and other stakeholders are still debating the best method to coordinate Bitcoins biggest upgrade since SegWit.

Per a public IRC chat discussion, the code for the fully primed-and-ready Taproot upgrade will be deployed sometime between March 17 and March 31 (or April if necessary), but the actual signaling that kick-starts the activation process probably wont start until July.

If everything goes as planned, then Bitcoins economic majority (miners and node operators who run Bitcoins code) could update within two weeks of the signaling periods start. Come August 2022, Taproots activation period will reach its timeoutheight and signaling will end.

Assuming mining pools reflecting 90%+ of Bitcoins hashrate support Taproot before the timeoutheight (as one survey indicates), then the vast majority of support would ensure Taproot is a success, and the other 10% or so (the economic minority) can update without consequence afterward.

But what happens if the mining pools dont signal to activate Taproot? Well, thats where the hang-up is in discussion right now. But for some of Bitcoins stakeholders the hang-up shouldnt even exist.

True or false?

First, a quick note about Bitcoin upgrades.

Unlike a centralized network, whose central operators can mandate an upgrade whenever and however they choose, Bitcoins network is decentralized, so upgrades require deliberate decision-making and discussion among Bitcoins stakeholders (namely, developers, miners, business and power users). Taproot is a soft fork, meaning a change that is compatible with previous versions of the software (unlike a hard fork, where newer rule-sets and older rule-sets are incompatible).

Soft fork or not, at the heart of the matter for activating Taproot is whether to give node operators (those individuals running Bitcoins source code) an option to force activate the upgrade if a supermajority of miners fail to support it before the timeout.

This would allow node operators to reject blocks from miners who dont support the upgrade. This sort of measure (a so-called user-activated soft fork) was used to prod along the SegWit upgrade activation in 2017 and is believed to have budged the Overton window for miners to accept the upgrade.

The other option is to not include this feature at all. These Bitcoin Improvement Proposal (BIP) options to force or not force the upgrade are referred to respectively as BIP8 (true) and BIP8 (false), also known as LOT=true and LOT=false. LOT is short for lockinontime, a feature that dictates whether Taproot will be locked in if network-wide activation isnt reached when the timeoutheight is reached; the (true) option automatically mandates the upgrade after the activation window expires, while (false) lets it fail entirely.

Opponents of BIP8 (true) say this aggressive measure is gratuitous because Taproot isnt at risk of failing. As Bitcoin Core contributor Andrew Chow put it, with the Taproot activation survey sent to miners, the community has already decided to activate, [so] theres no need to [do] LOT=true. Miners are part of the community.

Could Taproot activation cause a Bitcoin chain split?

Still others in favor of BIP8 (true) believe it is a necessary feature for coordinating the upgrade, which in the rarer circumstance of extreme discoordination, could split the Bitcoin network into incompatible versions if something goes wrong.

LOT=true does not split the chain. It strictly reduces the likelihood of that, BIP8 (true) primary proponent Luke Dashjr said in the chat.

Dashjr shares this view with others, like hsjoberg, who noted, Lot=true would make sure upgraded nodes mandate a specific chain. This means that node operators who run true would mandate that the Taproot-activated version of Bitcoin is the real chain, so theoretically this would help coordinate consensus between actors to avoid a split.

One brg444 contended that if lot=true activates there will be a network split. But this would only be if the forced activation went through. Brg444 said they think this is unlikely, because the threat of this very split would be enough to scare miners into activating before the forced activation occurs.

The ghost of SegWit past

But is a scare tactic really necessary or is it an egregious show of force?

[In my opinion, people] have PTSD from SegWit [theyre] being preemptively defensive for seemingly no reason other than theyre afraid of past events that now seem to have a low probability of actually occurring, Lightning Labs CTO Olaoluwa Osuntokun said in the chat, referring to miners originally opposing the activation of SegWit.

[P]pl are just shadow boxing casper rn lol, he said later. Lets give [BIP8 (false)] a shot and revise afterwards if stuff actually happens.

After all, if six months or so after activation begins miners havent signaled for Taproot, then LOT=true could be coded in after the fact to enforce the upgrade.

Still, this would add yet another step to the process, and making this change post-factum would be more cumbersome than just including it in the initial release. But some think its a more prudent decision, especially considering the stigma that brands Bitcoin development as a closed garden that is subject to the tending of developers only.

LOT=true appears as if the developers are forcing a change upon the community. While that may not necessarily be the case, the appearance of that happening is not a good thing. Given that we dont believe there will be any issues with activation, I would prefer LOT=false to avoid this view, Chow said.

A question of coordination

Notably, the last meeting to discuss Taproot seemed to indicate majority support for LOT=false. With only 100 or so attendees this round (as opposed to nearly double the attendance last time), and some favor growing for LOT=true, though, we cant really measure community consensus, contributor Darosoir said.

According to the Taproot activation wiki, 26 attendees in yesterdays meeting vocally favored LOT=false while 19 favored LOT=true (some more neutral parties indicated they would be fine with either).

Hardly representative of Bitcoins sprawling international community, the IRC chatters left the meeting without clear consensus on the precise activation parameters, with some voicing the need to boil down the complexities of the process to get a more informed opinion from the wider community.

I will say, though, that I think this discussion would have benefitted from having a more clear view of the community overwhelmingly supporting this. Off topic for this meeting, but anyone interested in how to get better data around this, Id be interested to work with, Keagan McClelland, co-founder of Start9 Labs, wrote in the chat.

With a date set for the end of March and the bulk of the activation parameters chosen in BIP8, the final question to answer for Taproots deployment is whether or not to include the user activated soft fork measure from the get-go or not.

Taproot will ship by BIP8 in late March and activation is slated for July, so this question will have to be answered within the month.

Continued here:
Bitcoin Taproot Upgrade Expected to Begin Activation in July - CoinDesk

What happened

Bitcoin (CRYPTO:BTC) reached an unprecedented milestone for a cryptocurrency on Friday morning. The price of Bitcoin tokens surpassed $53,700 each, carrying Bitcoin's market capitalization over $1 trillion. And stocks that are related to Bitcoin like Riot Blockchain (NASDAQ:RIOT), Canaan (NASDAQ:CAN), and The9 Limited (NASDAQ:NCTY) are all soaring today as a result, up 21%, 33%, and 23%, respectively, as of noon EST.

According to Coinbase, Bitcoin is up around 5% over the past 24 hours, hitting all-time highs above $54,300.But there are other cryptocurrencies making much bigger moves today. One is Binance Coin (CRYPTO:BNB), up roughly 49% as of this writing. And this outsize move is probably telling us something.

Image source: Getty Images.

For the record, Riot Blockchain, Canaan, and The9 didn't report news that warranted moving their stock prices this much. Canaan and The9 didn't report anything at all. Riot Blockchain filed with the Securities and Exchange Commission (SEC), showing insider Hannah Cho acquired 12,500 shares.On the surface it seems bullish. However, Cho was recently added to the board of directors, and these shares came free with the deal.

Therefore, the real news today is what's going on with Bitcoin. So far in 2021, we've seen growing adoption from Wall Street. One recent adopter was Tesla, which added $1.5 billion in Bitcoin tokens to the balance sheet. CEO Elon Musk took to social media today to explain the move, essentially saying it was a way to hedge against inflation.

In time, there's a chance more companies will see this issue as Tesla has, creating more demand for Bitcoin as they buy tokens (by the way, even private companies are buying Bitcoin, including The Motley Fool). But not all corporations add a small Bitcoin position as a hedge. Some, like MicroStrategy (NASDAQ:MSTR), appear to be going all in.

MicroStrategy just issued over $1 billion in convertible notes to buy more Bitcoin. On one hand, it's going to buy less than Tesla bought. But Tesla is a $760 billion company. By contrast, the market cap of MicroStrategy is under $10 billion. Moreover, the company already owns over 71,000 Bitcoin tokens worth around $3.8 billion. Therefore, whatever happens to the price of Bitcoin going forward is going to directly impact MicroStrategy stock one way or the other.

Image source: Getty Images.

While it's just one company, MicroStrategy's $1 billion demand for Bitcoin is enough to outpace the new supply of tokens in the short term. This can cause the price to keep rising. And as the price quickly rises, it can attract more buyers who are afraid of missing out. And that may be what's happening.

Let's come full circle back to Binance Coin. It's the native token of Binance -- one of the largest cryptocurrency exchanges in the world. Demand for this coin is increasing as more people start using Binance. Beyond that, it appears Binance's PancakeSwap is creating more demand for Binance Coin as well.

I'll try not to stray too far into the weeds. Blockchain networks facilitate decentralized finance (DeFi) -- no one is in charge, and there's not a physical headquarters. There are only computer protocols facilitating exchange. One popular decentralized exchange is Uniswap, which is built on the Ethereum blockchain.

However, some complain that the fees on the Ethereum blockchain are too high. PancakeSwap works like Uniswap, but is built on the cheaper Binance blockchain. Therefore, it appears new users are flooding Binance and switching to PancakeSwap in recent days, causing the price of Binance Coin to surge.

The point is, the rising price of Bitcoin is getting a lot of attention. More and more, people are looking to invest in cryptocurrency and cryptocurrency stocks. On one hand, I personally think there's some good investments in the space. However, investors should always be cautious when approaching a new investment -- fear of missing out (FOMO) should never be the foundation of your investing thesis.

Furthermore, even when you've developed a good investing thesis, it's still important to maintain a diversified portfolio because it spreads out risk. And there's undoubtedly risk with cryptocurrencies.

Read the rest here:
Riot Blockchain, Canaan, and The9 Stock All Soared Today as Bitcoin Becomes $1 Trillion Asset - Motley Fool

The hodl-crew are having quite the moment as bitcoin passed the $50,000 mark earlier today for the first time. Data pegs the peak at just over $50,500.

The price of bitcoin, the worlds best-known cryptocurrency, has historically proven a reasonable proxy for consumer interest in the cryptocurrency space, and for trading activity amongst blockchain-based assets. Bitcoins price has retreated since the milestone, and is now worth just over $49,000.

Bitcoin has been on a tear this year, rising from around the $30,000 mark at the start of 2021 to its recent $50,000 milestone, a gain of around 66%. Looking back a year and the gains are even more impressive, with the price of bitcoin rising from around $10,000 a year ago to its current price, a gain of 400%.

Luckily for investors and believers in other decentralized tokens, its not just bitcoin that is enjoying a valuation updraft. Cardano, one of the most highly valued blockchain assets, is up around 27% in the last week, according to CoinMarketCap. Its total value is nearing the $27 billion mark.

Companies built atop the burgeoning cryptocurrency space could be enjoying a boom as the price of bitcoin advances; as trading activity and consumer interest tend to rise along with the price of bitcoin, and companies like Coinbase make money from trading activity and consumer use, 2021 is starting off strongly.

Coinbase has filed to go public, and intends to pursue a direct listing in short order.

Whats driving up the price of bitcoin and its sister-tokens in the short-term? In a market melt-up its hard to point fingers with any accuracy. But broadly speaking, if it feels that nearly every asset class is setting new all-time records, so why not bitcoin as well?

Here is the original post:
Bitcoin briefly breaks the $50,000 barrier as Coinbases direct listing looms - TechCrunch