Hey everyone me kevin here: wow. We just had our first bitcoin upgrade in four years and in this video i'm going to describe what happened. What the benefits are, what this means to you, and what does this mean for ethereum, because now some people are asking is ethereum dead and that can't be good, given that i also invest in ethereum and bitcoin. So let's get right into this okay.

So what happened so the tap root soft fork happened and, unlike the last massive update, that we had in 2017, which some called so crazy and divisive that they saw it as a civil war of a bitcoin. The taproot update was a soft fork and was mostly supported nearly a 90 plus a percent consensus and compared to a heart fork. We just ended up with one block chain rather than two see for those wondering a hard fork is when a block chain splits, and then you have an entirely new chain and the original old blockchain that still exists. So you've essentially turned one blockchain into two blockchains.

One with slightly updated rules: this is what happened to bitcoin in 2017 and then the older blockchain. The original version, which wanted to keep smaller, essentially byte limits on each transaction to keep transactions simpler to mine, ended up being later called bitcoin cash, which is actually still popular amongst many today uh, and that was the result of a hard fork. Where, again now you had two blockchains and two totally different, now cryptocurrencies all out of the result of a hard fork of what was previously just bitcoin. Now you have bitcoin and bitcoin cash.

Well, in this soft fork, you just have bitcoin becoming bitcoin uh with updated rules. Now the cool thing about this update is well a lot since, in june we had over 90 percent of miners signaling their support for this upgrade to occur. They ended up setting this update to occur at a block in agreeing to this that the update would occur on block 7009 632 and that block has just successfully passed and miners have successfully migrated over to the new set of rules. This means that a new bitcoin improvement and bitcoin improvement protocols, the first massive change, since the bundle of 2017 have made it.

We are live the bundle in 17 by the way that created this civil war. S kind of disaster was known as segwit or segregated witness, but that doesn't matter so much because right now we got to talk about taproot and what the heck it means for the future of bitcoin and ethereum all right. So first taproot gives bitcoin greater opportunities for smart contracts. Smart contracts are a variety of automated agreements that individuals can make with one another and are super popular today, especially with nfts non-functional tokens like crypto punks, but there are thousands of different applications.

Let's just look, for example, at cardano cardano just introduced and really widely chained, wide enabled smart contracts via their alonzo fork in september of this year, and here are just a few examples. I'm going to pull this up on screen now. Here are just a few examples of all of the different types of d, apps or dapps. Essentially, d phi applications shortened and spelled d apps, but pronounced dapps.

Here they are, there are a whole lot of them. Some of these are meant for gaming. Some of them are meant for nfts, like crypto nitties. You've got uh payment opportunities here, like travala.

You've got uh derivatives, stable coins, insurance called ensure here and you've got lending and borrowing as well, which you see a lot of these used for uh real estate, hard money transactions as well, which many of you know. I sell programs on building your wealth. Specifically, a few for real estate, real estate agents, one for zero to millionaire real estate, investing getting started, another one for do-it-yourself property management and rental renovations and upgrades. Oh i'm big on real estate.

So when i hear real estate hard money transactions through d5, i get kind of excited, but that's just an example of some of the very many uh programs that you could use. Uh, smart contracts for it's incredible and now bitcoin is inheriting some of the benefits of this. Now it's going to be a while before we actually see a lot of these contracts live, but here's some of the other uh updates and benefits that we might see out of this tap root, upgrade so number one. Smart contracts number two privacy, and that's because today you can tell if a transaction is multi-signatured or single signature and taproot changes.

This taproot essentially enables snore signatures to try to say that 10 times fast and while the complex details of this are way above my head, at least at this point, as i'm doing my best to learn all of this as much as possible, with the cryptocurrency rabbit Hole goes very, very, very deep and doing my best to learn, but anyway, and the algorithm is known as the elliptic curve digital signature algorithm and it essentially collapses. Multiple signatures into one, for example, before this upgrade. If you had a contractor transaction with 20 different people, you'd have to have 20 different signatures, 20 different public keys, and then these sets would have to be verified at each of them and that burns time computing power. It ultimately costs a lot of money and it takes up a lot of space on the blockchain, because you got to document all this stuff and you essentially pay for your transactions and how much data needs to be verified.

So the more data you put in the more you have to pay, and so that made older kind of contracts, clunky and expensive with bitcoin. But now you can batch these together and essentially bulk verify this set, and this really means you can now conduct transactions much faster and for a much lower cost than you previously could, by essentially creating one sig hash, that's immutable or unchangeable, and that's now verified or Verifies multiple signatures and then permanently records them kind of, as one say, cash. That's immutable, not changeable. Now the benefit of this is you can now also hide details of smart contracts from public view within this sig hash.

Ultimately, bottom line. It means when details of smart contracts can be hidden from the public. You get privacy, but you also get other benefits beyond just privacy. You end up getting scalability the more you can fit into a blockchain transaction.

The more you can essentially do with smart contracts, see with bitcoin there's a 10 000 byte script limit. But now, since you have sig hash, you can put a whole lot more in or do a whole lot more in a smaller space which essentially lowers the cost. So you get privacy, you get scalability and now you're getting substantially lower fees, which is really good so so far, tap root, smart contracts, privacy, scalability, lower fees, but with less data being public and the proof of work system that you have with bitcoin, which you do Also, currently have, with the ethereum network, backing these transactions. We are bringing the security of bitcoin to essentially the ease of ethereum d5 transactions, and this is very bullish for bitcoin, because a lot of the criticisms of bitcoin have been that bitcoin's, potentially too slow.

You can't yet do smart contracts unless you go out to leverage level 2 in the lightning network, but there are complications with the lightning network and you don't really have a lot of smart contracts, yet yada yada great. So when do we get to use bitcoin smart contracts, and when is this all actually going to be a reality and how come the price of bitcoin isn't moving? Well, first, bitcoin, we'll start with that one, the price of bitcoin. It hasn't really moved much off this hard fork. It's rubber, banding right around 64 000, mostly because, as expected and hoped for, this update was pretty uneventful, which is kind of what you want anytime.

You do a fork, you don't want events happening, because that means you have problems happening and problems in defy are bad. Remember when we had problems with solana, which i think was unfair, but still you had problems with solana and all of a sudden within four hours. We were able to get verifiers uh or the bulk of them to uh. You know, two-thirds plus of them to be able to agree to restart the network and uh.

You know that that brings in the question the whole decentralized aspect. Now i've made a video disputing this, but still that's something that lingers. Ask anybody about solana these days and unless they're a bull, they probably refer to the outage. In september, i've broken it down.

Watch my solana, video just type into youtube, meet kevin solana, but anyway uh nothing happened so far with bitcoin, which is very very good, because if something did happen, uh then, obviously, especially something that could jeopardize the network. You could kill confidence in the entire technology, which would be very bad, but it's also worth noting that you didn't really get this big cardano, slash, fork style run up in the price of bitcoin which ended up. Turning into this buy the rumor sell the news for cardano, where it ran from a buck 30 to almost well actually just over three dollars and then fell a dollar down to somewhere around two dollars right. This was really uh sort of a buy the rumor momentum and then a sell.

The news plummet that you saw with cardano. You didn't really get that here with bitcoin. What you really just had was actually a very successful fork so far at least - and this has again led people to say wow that went so well. Does this now end ethereum? Is this the ethereum killer, because this is really what level two solutions like ethereum have done for d5 and now bitcoin can do it well.

The answer here is no. The update to bitcoin here will really likely take years to come to full fruition. By that point, we could be at a totally different level with ethereum we could get to uh. You know the proof-of-stake version of ethereum, which is highly anticipated next year there there are some folks who are saying we're, never actually going to get to proof of stake.

We're not going to be able to get this fork done. This transition done a lot of folks very, very hopeful here for ethereum. So there is a lot of contention, though, in terms of what the future of ethereum might bring, but at least in the meantime, what we do know is these benefits that ethereum has minus the fact that ethereum at the moment is kind of expensive. In many cases, uh bitcoin now actually gets in a more usable way.

This means developers can now create smart contracts, cheaper, faster, more scalable, more secure than ever before, and we have more privacy than ever before, with smart contracts and bitcoin, and so you've essentially just turned on the switch for like all right. Everybody now go build programs, and this is exciting which, if you like programs, make sure to check out the programs on building your wealth link down below, because there's a wonderful coupon code there and remember price always goes up so you're never going to get a lower Price, if you buy today so check those programs out down below but seriously, look it's going to take a while before we actually get functionality out of this bitcoin update, but it is a huge update is very, very, very good for the future of bitcoin. I find this very, very bullish and the fact that this went so smoothly and without a h and kind of got low media attention, in my opinion, is a very good sign and it's a reason to be bullish. It's a reason to celebrate bitcoin so uh.

Do i again think it is an ethereum killer? No yeah ethereum killer would be ethereum not being able to get over to proof of stake, and then you starting to lose confidence in the entire ethereum network and then does it maybe just stay a proof of work. Uh competitor, but then it doesn't have that quite deflationary aspect, because you're still minting more than you're burning via gas fees uh, and if gas fees go down there are a lot of uncertainties right look. There are a lot of uncertainties with all cryptocurrency regulation. It doesn't matter, you name a blockchain.

I will name 10 uncertainties for you, okay, but the good news is at least for bitcoin and ethereum right now. This is all just bullish for the entire industry. I don't think that this necessarily means bitcoin is now better than ethereum we're not even close to that and again by the time we might actually be. Ethereum could have potentially leveled up to the next stage or it could die right, which is also impossible.

I don't expect that, but uh you can never say never anyway. Thank you so much for watching this again check out the programs on building your wealth link down below and folks, we'll see in the next one. Thank you so much goodbye.