After 7 years in the making, Bitcoin has finally implemented a major update to its system as Taproot went live at block 709,632, 5:15 UTC on Sunday – November 14, 2021.
The Taproot protocol aims to obscure complicated transactions to increase privacy on-chain while making transactions cheaper and more lightweight.
To do this, Taproot replaces Bitcoin’s current signature protocol with Schnoor Signatures as it will make transactions smaller, while improving the scalability of the system using multi-signature scripts.
Taproot further increases the scalability limit of the script, by not necessitating the user to reveal the entire script when in use.
Meanwhile, privacy remains of utmost importance, as the update enables the ability to create all kinds of conditional situations where coins can be spent by other parties. It will also use the new witness version one to distinguish from older transactions.
Although this is great news for Bitcoin, it isn’t automatically implemented. The ball is now in the court of developers to make use of and build on top of the Taproot system.