Marathon Digital To Begin Signaling For Bitcoin Taproot Activation: Here's What That Means

Marathon Digital Holdings, Inc MARA a large Bitcoin (BTC) miner which operates the Mara Pool, will implement the latest Bitcoin Core 0.21.1 software on its mining hardware, signaling support for Taproot soft fork.

What Happened: The Nevada-headquartered company said in a statement Monday that the latest software update contains a “variety of features,” including Taproot. These features are “designed to improve privacy, improve scalability, and lay the groundwork for future enhancements to Bitcoin's functionality.”

Marathon said it would adopt the update without modification. “As a result, Marathon's mining pool, MaraPool, will no longer filter transactions,” said the company.

“Once the update is complete, the pool will begin validating transactions in a manner consistent with all other miners who use the standard node.”

Marathon CEO Fred Thiel said that the company would update all its miners to full standard Bitcoin core 0.21.1 node over the coming week.

See Also: How to Buy Bitcoin (BTC)

“By adopting the full standard Bitcoin core node, we will be validating transactions on the blockchain in the exact same way as all other miners who use the standard node,” said Thiel.

BTC traded 7.39% higher at $36,995.86 at press time. The cryptocurrency is in the red by 2.77% over a seven-day trailing period.

Why It Matters: The taproot update allows for enhanced privacy and fungibility of all bitcoins, as per the 0.21.1 release notes available on bitcoincore.org. Other listed benefits include lower fees and efficiency improvements.

“Together, the improvements lay the groundwork for future potential upgrades that may improve efficiency, privacy, and fungibility further,” the release notes read.

Blockstream co-founder and CTO Gregory Maxwell — a Bitcoin core developer — proposed Taproot back in January 2018.

90% of the blocks mined within a 2016 block period will have to signal for the deployment of the soft fork for it to be activated. 

In a note, Cathie Wood-led Ark Invest described Taproot as the "most highly anticipated and well-supported Bitcoin upgrade since SegWit."

Marathon’s latest announcement is in contrast with the one it made at the end of March when it said it would filter transactions so as to adhere to anti-money laundering regulations and to be in compliance with OFAC’s standards.

The company’s stock has shot up 137.3% on a year-to-date basis buoyed by frothy cryptocurrency valuations. Over a year, Marathon has skyrocketed a whopping 3,438.6%.

Price Action: Marathon shares closed 4.14% lower at $24.77% in Friday’s regular session.

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