The first bitcoin update in four years, dubbed "Taproot", went live on Sunday.

The update was first confirmed in June of this year, when over 90 per cent of bitcoin miners signalled their support.

Taproot was first proposed by Gregory Maxwell, a bitcoin core contributor, in 2018.

The update could potentially allow developers to release new features that would improve privacy, scalability, and security on the network.

Taproot will see “Elliptic curve” digital signature algorithms, which the cryptocurrency has used since it was released in 2008, replaced with “Schnorr signatures”.

This variety of digital signature was invented by German mathematician Claus-Peter Schnorr and the patent on the technology expired in 2008.

In addition, Taproot could potentially enable the use of "smart contracts", which are a common use case of competitor cryptocurrency Ethereum.

Last time the world's most popular cryptocurrency was updated was in July 2017, which was dubbed “SegWit".

Cryptocurrency users will not be able to benefit from the Taproot update until their wallet supports it, which will mean the wallet’s developers implementing new code.

It took the previous bitcoin update SegWit about two years to reach 50 per cent adoption according to data from bitcoin analyst website Woo Charts.

Bitcoin is currently trading at $65,951 today with a market capitalisation of $1.247 trillion.

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