Crypto exchange Coinbase has enabled Taproot support for bitcoin transactions, giving users access to more on-chain destinations and potentially smoother, more efficient Bitcoin transactions.
The exchange announced the upgrade in an Oct. 8 X post, saying Coinbase.com users would be able to send bitcoin to Taproot addresses.
Taproot was a significant Bitcoin upgrade in 2021, which enabled signature aggregation, improved privacy and reduced transaction size. The upgrade made smart contracts on Bitcoin more efficient and made the network more compatible for decentralized finance (DeFi) applications.
Taproot supports innovations like Bitcoin-native tokens, including BRC-20. Some market participants are now speculating that Coinbase’s support for Taproot provides the technical foundation that could enable support for Ordinals and Runes down the line
In order for Taproot to be successful, it still needs to see widespread adoption, which would involve major exchanges implementingTaproot support for both deposits and withdrawals.
Coinbase’s retail users will now be able to take full advantage of Taproot — previous attempts to transfer bitcoin from a Coinbase wallet to a Taproot wallet resulted in some transactions being stuck-in-limbo or declined.
“We have fixed the underlying issue that led to these stuck transactions – going forward, when a customer attempts to send BTC to a taproot address, it will fail and return funds automatically,” said Coinbase in an email to users who had their transaction stuck in a pending state.
The exchange joins crypto exchanges OKX, Kraken, Bitfinex, BitMEX, and Blockchain.com in supporting Taproot. However, Binance, Crypto.com and Gemini are still yet to enable support for the upgrade.
