Shitcoins on Bitcoin. In November 2021, Taproot update has been activated on Bitcoin. An update that will have opened Pandora’s Box on Bitcoin. NFTs, altcoins and soon stablecoins, Bitcoin has become a multi-asset blockchain. Lightning Labs wants to go further by unveiling Taproot Assets.
Taproot Assets: shitcoins on Bitcoin
Since the start of the year, Bitcoin has been at the heart of new attention. Indeed, the advent of the protocol Ordinals and the emergence of NFTs on Bitcoin, then BRC-20, reignited the enthusiasm surrounding the network.
Now, developers are doubling their ingenuity to come up with new, innovative solutions for the network.
On October 18, Ryan Gentry of Lightning Labs announced the deployment of Taproot Asset on the Bitcoin mainnet, announcing “A new era for bitcoin”.
In practice, Taproot Assets is a protocol that allows developers to issue and manage new assets on Bitcoin. Thus, the goal is to make Bitcoin a multi-asset blockchain, while preserving the security of the network.
“Taproot Assets provides developers with a comprehensive experience for issuing, managing and mining stablecoins or other assets on the Bitcoin blockchain. »
At the moment, Taproot Assets allows the issuance and management of assets on the Bitcoin blockchain. However, the Lightning Labs teams obviously want to ambition to also bring the protocol to the Lighting Network of Bitcoin.
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How it works ?
You will have understood, Taproot Assets relies on the new type of transactions introduced by Taproot at the end of 2021.
When creating an asset with Taproot Assets, a unique ID is generated for that asset. Next, an asset script is created. This script determines, among other things, to whom the newly created assets will be assigned.
This attribution is made thanks to a “ sparse Merkel tree“. In this tree, each account is represented by a unique 256-bit key. Each “leaf” of this tree, corresponding to a key, contains information on the amount of assets held by the account.
Each leaf of this tree contains essential details about the asset, such as its type, ID, amount, and data of previous transfers of that asset.
Once the Merkle tree and asset script are generated, they are published to Bitcoin via a Taproot transaction. Subsequently, the holders of the generated asset will be able to transfer it, also, via a Taproot transaction.
This new proposal comes a few days after another major proposal for Bitcoin: BitVM. So, BitVM increases the computing capabilities of the Bitcoin network tenfold.
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