taproot
Taproot is Bitcoin's most significant protocol upgrade since SegWit, activated in November 2021. It introduced Schnorr signatures, MAST, and Tapscript, delivering privacy improvements, lower fees for complex transactions, and a more flexible scripting system.
Taproot was activated on the Bitcoin network at block 709,632 on November 14, 2021, making it the largest protocol change since SegWit in 2017. The upgrade bundled three Bitcoin Improvement Proposals: BIP 340 (Schnorr signatures), BIP 341 (Taproot itself), and BIP 342 (Tapscript). It was deployed via a soft fork, meaning it remains backward compatible with older nodes that have not upgraded.
Schnorr signatures replace Bitcoin's existing ECDSA signature scheme with a mathematically more elegant alternative. Schnorr signatures are smaller and faster to verify, and they enable signature aggregation, where multiple parties can combine their signatures into a single one. This is particularly useful for multi-signature transactions, which under Taproot can appear identical to simple single-signature transactions from the outside. MAST, Merkelized Alternative Script Trees, allows complex spending conditions to be committed to in a way where only the executed branch of a script is revealed on-chain; unexecuted paths remain hidden.
Tapscript updates Bitcoin's scripting language to support the new signature scheme and to make future upgrades more straightforward. Together, the three components improve privacy by making complex and simple transactions look more alike on the blockchain. They reduce fees for advanced use cases by minimising the data that must be published. And they lay the groundwork for further protocol improvements, providing a more flexible foundation for Bitcoin's continued development.