What is Taproot?

Taproot is a significant upgrade to the Bitcoin protocol that was activated in November 2021. It introduces several key improvements to the network, focusing on privacy, efficiency, and flexibility. The main components of Taproot include:

1. Schnorr Signatures: Before Taproot, Bitcoin used the Elliptic Curve Digital Signature Algorithm (ECDSA) for its signatures. Taproot switches to Schnorr signatures, which offer several advantages. They allow for the aggregation of multiple signatures into one for a single transaction, reducing blockchain space and improving privacy by making complex, multi-signature transactions indistinguishable from simple, single-signature transactions.
   
   

2. Merkleized Abstract Syntax Trees (MAST): MAST improves the flexibility and privacy of Bitcoin scripts by allowing users to lock bitcoin using complex conditions. Only the executed condition, rather than all possible conditions, is revealed at the time of the transaction. This means that complex conditions for spending bitcoin can be created without revealing all the details on the blockchain, enhancing privacy and reducing the space used on the bitcoin blockchain.
   
   

3. Tapscript: This is an update to Bitcoin's scripting language that makes it compatible with Schnorr signatures and MAST. It introduces new opcodes and modifications to existing ones to enhance the functionality and efficiency of complex transactions on the Bitcoin network.

The combination of these features allows for more privacy and efficiency in transactions, as well as increased potential for smart contracts on Bitcoin. It makes transactions smaller, cheaper, and faster, while also enabling more complex conditions for transactions that can enhance the functionality and security of the network.