Taproot

Taproot is a major Bitcoin upgrade outlined in BIPs 340, 341, and 342, bringing notable improvements in privacy, efficiency, and flexibility. The upgrade introduces the Schnorr signature scheme, which replaces the older ECDSA signatures, offering faster verification, enhanced security, and simpler multisignature transactions through MuSig. These changes make multisig transactions more private and cost-effective.

Taproot also allows users to send and spend bitcoin using either standard public keys or more complex scripts—all with improved privacy, since most transactions will appear identical on the blockchain. This is made possible by a new output type, Pay-to-Taproot (P2TR), using SegWit version 1 and Bech32 addresses. By combining these features, Taproot makes Bitcoin transactions more versatile and scalable while keeping user activity more private.