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Bitcoin Taproot upgrade: what it means

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The first bitcoin upgrade in four years has just been approved by miners around the world. It is a rare moment of consensus among stakeholders, and crypto experts tell CNBC it’s a pretty big deal for the world’s most popular cryptocurrency. 

The upgrade is called Taproot, and it’s due to take effect in November. When it does, it will mean greater transaction privacy and efficiency – and crucially, it will unlock the potential for smart contracts, a key feature of its blockchain technology which eliminates middlemen from even the most complex transactions. 

“Taproot matters, because it opens a breadth of opportunity for entrepreneurs interested in expanding bitcoin’s utility,” said Alyse Killeen, Founder and Managing Partner of bitcoin-focused venture firm Stillmark.

Unlike bitcoin’s 2017 upgrade – referred to as the “last civil war” because of the contentious ideological divide separating adherents – Taproot has near universal support, in part because these changes are fairly incremental improvements to the code.

What’s changing

Bitcoin’s makeover has to do with digital signatures, which you can think of as the fingerprint an individual leaves on every transaction they make.

Right now, the cryptocurrency uses something called the “Elliptic Curve Digital Signature Algorithm,” which is created from the private key which controls a bitcoin wallet and ensures that bitcoin can only be spent by the rightful owner. Taproot will switch over to something known as Schnorr signatures, which essentially makes multi-signature transactions unreadable, according to Alejandro De La Torre, Vice President at Hong Kong-headquartered major mining pool Poolin.

In practice, that means greater privacy, because your keys won’t have as much exposure on the chain. “You can kind of hide who you are a little bit better, which is good,” said Brandon Arvanaghi, previously a security engineer at crypto exchange Gemini.

It won’t translate to greater anonymity for your individual bitcoin address on the public blockchain, but it will make simple transactions indistinguishable from those that are more complex and comprised of multiple signatures. 

These souped-up signatures are also a game changer for smart contracts, which are self-executing agreements that live on the blockchain. Smart contracts can theoretically be used for practically any kind of transaction, from paying your rent each month, to registering your vehicle.

Taproot makes smart contracts cheaper and smaller, in terms of the space they take up on the blockchain. Killeen says that this enhanced functionality and efficiency presents “mind blowing potential.” 

Currently, smart contracts can be created both on bitcoin’s core protocol layer and on the Lightning Network, a payments platform built on bitcoin, which enables instant transactions. Smart contracts executed on the Lightning Network typically lead to faster and less costly transactions.

“Lightning transactions can be fractions of a penny…while a bitcoin transaction at the core protocol layer can be much more expensive than that,” explained Killeen.

Developers have already begun to build on Lightning, in anticipation of the upgrade, which will allow for highly specific contracts.

“The most important thing for Taproot is…smart contracts,” said Fred Thiel, CEO of cryptocurrency mining specialist Marathon Digital Holdings. “It’s already the primary driver of innovation on the ethereum network. Smart contracts essentially give you the opportunity to really build applications and businesses on the blockchain.”

As more programmers build smart contracts on top of bitcoin’s blockchain, there is also the potential for bitcoin to become more of a player in the world of DeFi, or decentralized finance, a term used to describe financial applications designed to cut out the middleman.

Today, ethereum dominates as the blockchain of choice for these apps, also referred to as “dapps.”

Why the wait

Though the bitcoin community has agreed to the upgrade, the rollout itself won’t happen until probably November. A lot of testing ahead of time will reduce the likelihood of something going wrong during an upgrade.

“Upgrades allow the – extremely remote – possibility of a bug entering the system, which would destroy confidence in the whole cryptocurrency system, effectively wiping it out – a ‘self-inflicted wound’ if you like,” said Jason Deane, an analyst at Quantum Economics.

Deane says this is why upgrade processes are so carefully tested, retested, and vetted, again and again, over very long periods of time, prior to being deployed.

Many also remember the disastrous migration of 2013, when an upgrade gone wrong resulted in bitcoin temporarily splitting in half.

“You don’t want different clients or miners in the protocol out of sync. That’s how catastrophic stuff happens,” Nic Carter, founding partner at Castle Island Ventures, told CNBC. “Because we don’t want a repeat of 2013, we have these extremely long lead times.” 

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Bumble to give employees a collective week-long holiday twice a year

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Founder and CEO of Bumble, Whitney Wolfe Herd

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Dating app Bumble on Thursday announced the company-wide week off that it implemented last month will become a permanent perk, now giving all workers the same two weeks’ paid vacation each year. 

Bumble said it was making the company-wide week-long vacation a permanent benefit to its 700 employees twice a year. In addition, the women-led dating app said its employees would now have unlimited paid vacation days with uniform minimums. 

In June, Bumble gave all its workers the same week off in an effort to combat burnout, noting that like most people its global team had experienced a “very challenging time during the pandemic.” 

Tariq Shaukat, president of Bumble, said it had become “increasingly clear that the way that we work, and need to work, has changed and our new policies are a reflection of what really matters and how we can best support our teams in both their work and life.” 

Bumble also announced updates to other employee policies and benefits. 

It said it was not requiring all employees to go back to working in the office full-time after working remotely during the coronavirus pandemic, but it would expect staff to work in the countries in which they are employed. In addition, Bumble said it would be providing employees with access to co-working spaces for those whose living arrangements were not suitable for remote working. 

Bumble said it would now be giving employees a minimum of six months paid leave for the birth, adoption or surrogacy of a child and a minimum of four weeks flexible working to transition back into work for caregivers. 

Bumble workers would be able to take a minimum of 12 weeks leave a year to take care of a family member. 

The company said that an employee who was a victim of domestic violence or another violent crime would be able to take a minimum of 20 days paid leave. 

Staff would be able to take a minimum of 15 days paid compassionate leave, Bumble said. This included taking leave following a miscarriage. 

Check out: British role-playing game retailer hands staff a £5,000 bonus following bumper lockdown sales

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Wealthier parents pressure teachers over grades in England: research

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The parents of privately educated children in England were found to be twice as likely to put pressure on teachers over exam grades than those from the most deprived areas, according to new research.

Some 23% of teachers working at private schools in England said that one or more parents had approached or pressured them over their child’s grades during the past academic year.

There was evidence of a social gap between state schools, however. Of the teachers working at state schools in the most affluent areas of England, 17% said they had been pressured by parents over grades. By comparison, just 11% of teachers working at schools in disadvantaged areas had been approached by parents.

This was according to a poll of 3,221 teachers in England published on Thursday. The research was conducted by Sutton Trust, an educational charity focused on social mobility.

The closure of schools last year due to the coronavirus pandemic resulted in the cancellation of GCSE and A-Level exams, which are the U.K.’s high school and pre-college exams.

When exams were cancelled once again in 2021, teachers were put in charge of determining grades based on a number of alternative assessment factors such as mock exam grades, homework, as well as other forms of tests like “mini-exams” and open book exams.

However, the Sutton Trust poll found a disparity between how England’s most affluent students and its most deprived were being assessed. It found independent schools were more likely than state schools to use a wider variety of assessments to determine grades.

In addition, over half of teachers working in England’s most deprived schools felt that they had received insufficient support to decide students’ grades versus 44% of those working in the schools in the wealthiest areas of the country.

‘Never going to be perfect’

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UK to study using overhead wires to power long-haul trucks

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This photo, from 2019, shows a Scania cargo e-truck being powered by overhead electrical power lines on the A5 autobahn in Germany.

Alex Kraus | Bloomberg | Getty Images

The U.K.’s Department of Transport has commissioned a consortium to look into the viability of using overhead wires to power long-distance trucks.

Headed up by construction and engineering group Costain, it includes companies such as Scania and Siemens Mobility, among others, and represents the latest example of how industry and government are trying to develop solutions focused on decarbonizing transportation.

In a statement issued earlier this week, Costain explained how the consortium had “proposed an ‘electric road system'” that would harness Siemens Mobility’s “eHighway” technology, which uses overhead lines to provide trucks with electricity. 

According to Siemens Mobility, when using the eHighway, “trucks can operate completely electrically and at the same time charge their batteries without using fuel.”

The funding has been delivered via Innovate UK, the U.K.’s innovation agency. Costain said it was hoped the study, which is due to last nine months, would act as “the forerunner of a scheme that aims to see the UK’s major roads served by overhead lines by the 2030s.”

Breaking things down, the team will focus on the electrification of a stretch of road between the South Yorkshire town of Doncaster, its airport and the Port of Immingham, on the east coast of England. 

While the U.K.-based project will be looking into the potential of using overhead wires to power road-based transportation, the tech has already been deployed in other parts of the world. Siemens Mobility says tests of the eHighway are underway in Germany on three public routes.

Read more about electric vehicles from CNBC Pro

Sue Kershaw, Costain’s managing director for transportation, described the study as “another important step towards understanding how industry could work together to tackle one of the largest carbon emission producers in the country.”

News about the eHighway initiative comes at the end of a month in which the U.K. government said it wanted to create a net zero transport sector by the year 2050.

The above goal represents a major task. According to the government, transport was responsible for 27% of the U.K.’s greenhouse gas emissions in 2019. Breaking things down further, heavy goods vehicles accounted for 18% of emissions from road-based transport.

In a sign of how times are changing, a number of major companies are now attempting to develop solutions to the challenges posed by the electrification of larger vehicles.

Three major transportation firms, for instance, look set to work with one another on the development of a European charging network for “battery electric heavy-duty long-haul trucks and coaches.”

In a joint announcement at the beginning of July, Volvo, Daimler Truck and the Traton Group said they had signed a non-binding agreement related to the installation and operation of the network.

The goal is to set up a joint venture that all three firms would own an equal part of, with operations slated to commence in 2022.

As the number of EVs on our roads increases, extensive charging networks will need to be rolled out for all types of vehicles to meet increased demand and dispel lingering concerns around “range anxiety” — the notion that EVs aren’t able to undertake long journeys without losing power and getting stranded.

The electrification of long-haul, heavy-duty trucks and coaches poses its own set of unique challenges. As the International Energy Agency’s Global EV Outlook for 2021 notes, “long-haul trucking requires advanced technologies for high power charging and/or large batteries.”

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