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Taproot activated Nov 14th
The Taproot activation enables Bitcoiners to leverage the benefits of Schnorr signatures and gives Bitcoin developers the ability to create more complex transactions than simple ‘send and receive.’ This will create a base from which to build better privacy enabling tech in the future.
Taproot will utilize Schnorr signatures and is considered more secure than Elliptic Curve Digital Signature Algorithm (ECDSA) signatures on which Bitcoin cryptography currently runs. Schnorr signatures rely on fewer assumptions and eliminate any signature malleability that might have been present in ECDSA signatures.
Schnorr signatures will bring added privacy, lower fees, and enhanced multi-signature signing to Bitcoin. The privacy benefits from the Taproot upgrade come from the fact that by using Schnorr signatures and key aggregation, multi-sig contracts/addresses are now indistinguishable from single signature contracts. This makes on-chain analysis much more difficult because all contracts look the same.
Bitcoin Bond and Banks
El Salvador continues to jockey for the title of friendliest Bitcoin country in the world. President Bukele announced that the country will issue $1 billion in bonds on Blockstream's Liquid Network, a scarcely-used federated Bitcoin sidechain. The bonds have a coupon of 6.5%, roughly half the yield of the market currently prices for the country’s bonds. $500 million from the bond sale will be used to purchase bitcoin and the other $500 million for investment into the country’s volcanic mining farms.
The move seeks to attract capital and investors to the country as the bonds have a 6.5% yield and a fast-tracked citizenship. Bukele also announced his intentions to create a Bitcoin City near the Conchagua volcano. Geothermal heat from the volcano will generate the power to mine further bitcoin.
Bukele is not the only politician warming up to Bitcoin. New York Democrat Mayor-elect Eric Adams, Miami Mayor Francis Suarez, and two others have declared on Twitter that they plan to accept at least portions of their salaries in bitcoin.
Finally, Fidelity Digital Assets announced it will allow institutional customers to use bitcoin as collateral against cash loans. This enables wealthy bitcoin investors access to cash without selling BTC. This service looks to help mining companies, hedge funds, traders, and whale HODLers.
Bitcoin (and crypto) Take on Congress
On Wednesday, 12/8/21, the US Housing Committee met with the top executives of six major crypto companies before Congress. The topics covered at the “Digital Assets and the Future of Finance” panel spanned from everything from the challenges, advantages, and regulatory environment of the industry. The hearing served to improve Congress’ understanding of cryptocurrencies and how they fit into existing financial regulation. The common sentiment among the six representatives was that since crypto does not fit neatly within the existing legal regulatory environment, new laws specific to the sector are likely required for the space.
This meeting marked the first time major stakeholders in the crypto industry scored face-time with Congress. Many hoped the sit-down with Congress could help assuage their fears and help convince them to not hinder the financial innovation occurring in the crypto space.
The crypto representatives included:
- Samuel Bankman-Fried, Founder and CEO of FTX exchange
- Jeremy Allaire, Co-Founder, Chairman and CEO of the Circle
- Brian P. Brooks, CEO of Bitfury Group
- Denelle Dixon, CEO and Executive Director of Stellar Development Foundation
- Alesia Jeanne Haas, CEO of Coinbase Inc. and CFO of Coinbase Global Inc.
- Charles Cascarilla, CEO and Co-Founder of Paxos Trust Company
