Taproot is a soft fork that improves Bitcoin’s scripts to increase privacy and improve upon other factors related to complex transactions. Transactions on the Bitcoin network can use various features that make them more complex, including timelock releases, multi-signature requirements, and others.
Without Taproot, anyone can detect transactions that use those complex functionalities, which require the creation of multiple transactions. However, the Taproot upgrade will make it possible to “cloak” all the moving parts of a Bitcoin transaction that includes these features. So even if the transactions adopt those features, they will look like a single transaction. This is a big win for Bitcoin privacy advocates.
- Taproot integrates the Schnorr digital signature scheme into Bitcoin, upgrading Bitcoin’s core cryptography.
- Taproot builds on the SegWit upgrade to improve Bitcoin’s privacy and lower transaction fees.
- Taproot makes future Bitcoin upgrades easier by reforming Bitcoin’s scripting language.