On May 1st 2021, the first trial to signal Bitcoin’s Taproot activation has officially started. The method of choice involves miners and enabling them to either signal their consent to adopt the soft fork, or else ignore it entirely. So throughout 2016 blocks (approximately 2 weeks), 90% of the mined blocks need to signal Taproot activation in order for the soft fork to get deployed.
However, the beginning appears to be pretty rocky: at block height 681487, only one block (mined by Slush Pool) out of 80 has signalled the activation*. If 202 blocks don’t include the Taproot activation data, then the signalling will continue until the first difficulty adjustment on or after August 11th 2021. This gives us 6 activation epochs that can be used to reach the 90% threshold. For more details, read the release notes of the 0.21.1 release version of Bitcoin Core.
If the miner activation fails until the mid-August difficulty readjustment, then the community is going to look for another way to get Taproot (the most likely approach being UASF, or User-Activated Soft Fork, which means that every sovereign node operator will run the code).
Yet regardless of the decision, this is bullish for Bitcoin. It proves that the decentralization works, that participants follow their incentives instead of the popular opinions among the community, and therefore Bitcoin is censorship resistance. If this happened in Ethereum, it’s likely that everyone agreed with the decisions of a handful of founders (the support for EIP 1559 appears to be alarmingly unanimous). But this is Bitcoin and everything gets conducted in a way which allows all participants to voice their opinion. Even the process of determining the way to activate Taproot has been the subject of months-long deliberation.
At this point, it’s likely that miners find more convenience in the larger size of multisig transactions and other types of on-chain contracts (which Taproot reduces in size, and therefore makes the chain more scalable, private, and affordable to use for complex transactions). By activating Taproot, the miners would willingly give up on some fee subsidies for the sake of helping the network improve. Either this, or they are taking the Sunday off and don’t care much about signalling Taproot.
Anyway, this is another proof of Bitcoin’s decentralization. And regardless of the way we go forward, let’s keep on observing what’s going on for the rest of the weekend. There’s already a website that’s called taproot.watch which tracks every block and whether or not it signals the activation. In any of the 6 activation trial epochs, we need 1815 blocks out of 2016 to finally get Taproot. Let’s hope for the best.
Later edit: at block height 681543, only 4 blocks out of 137 have signalled Taproot activation and they were all mined by Slush Pool. Every other mining pool, from BTC.com to Binance and F2Pool, haven’t expressed their agreement with the Taproot soft fork.
Later edit 2: Thanks to the input by Murch and MC (whose input you can find in the comments), I have changed my factually-wrong phrasing from the second paragraph.
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