But the really big news is that this clears a path to make “smart contracts” more accessible, something that could broadly increase the scope of applications that can operate on the blockchain.
Bitcoin miners then “vote” on the proposed change by upgrading their software to a new version that includes the proposal.
These are currently encrypted with the “Elliptic Curve Digital Signature Algorithm,” which are being switched over to “Schnorr signatures.” For the layman, the important distinction between the two is that the new signature type obscures transactions that are composed of multiple signatures.
Being able to fit them on the blockchain allows for the adoption of all sorts of applications that are currently difficult to handle without fiat currency systems. For example, a smart contract can specify ownership rights over multiple steps of a transaction to work within complex logistics chains.
While this information will be obscured from the casual viewer, some internet forensics firms are already saying that they expect to be able to find this information.
Ethereum already has a more robust smart contract landscape, but sits behind Bitcoin in terms of uptake and value per coin.
Bitcoin had to weather a serious blow of this nature in 2013 when a version update inadvertently caused the blockchain to fork, but a quick consensus response from miners allowed for a fast recovery.
This bold experiment with the “wisdom of the crowds” became extremely popular among holders of Ether tokens, at least until hackers made use of potential security vulnerabilities outlined in a research paper to steal some $50 million in digital currency from its investors a few months later.