Just a few days after activation of the Taproot upgrade on the Bitcoin Network, Vietnam’s premier Bitcoin Exchange VBTC followed up by allowing it’s users to withdraw to Taproot (P2TR/Bech32m) addresses.
While currently not of much consequence just yet for users in terms of added functionality, allowing VBTC users to withdraw straight onto Taproot addresses helps the Bitcoin ecosystem in its transition to the new address format which will help to elevate the value propositions of Bitcoin especially in terms of privacy and scriptability.
Among other things, the adoption of the Taproot will allow for a much more elegant, blockspace-saving and private usage of Multisig addresses, which are – as Hugo Nguyen pointed out – an essential tool to make localism work in the approaching post-fiat world.
While it will take time for all these tools to be built out and adopted, the Bitcoin protocol is ready by now to support the development of such infrastructure and the true importance of this upgrade will only become felt and visible many years down the road as these new ways of interacting with Bitcoin take shape.
VBTC was previously Asia’s first Bitcoin Exchange to integrate withdrawals via the Lightning Network and has been operating in Vietnam as an on-/offramp from/to the local currency VND into Bitcoin steadily since 2014.