The Taproot upgrade went live on the Bitcoin Core software

On November 14, 2021, the Bitcoin network underwent one of its most significant upgrades with the activation of Taproot at block 709,632. This marked the culmination of a long-anticipated improvement to the network’s capabilities, focusing on enhancing privacy, scalability, and security.
 

Taproot was first proposed by Bitcoin Core developer Greg Maxwell in 2018 and was later codified through three Bitcoin Improvement Proposals (BIPs) authored by Pieter Wuille, Tim Ruffing, A.J. Townes, and Jonas Nick. The upgrade was a melting pot of various technical innovations, consolidating years of research and development into a single, comprehensive update.
 

The core of the Taproot upgrade is the introduction of Schnorr signatures, which replace the ECDSA scheme previously used for digital signatures in Bitcoin transactions. Schnorr signatures are not only smaller and faster than ECDSA signatures but also possess the property of linearity. This feature allows for more complex smart contracts and multi-signature transactions to appear as standard, single-signature transactions on the blockchain, significantly improving privacy.
 

Moreover, Taproot enables more lightweight and intricate smart contracts, which can be executed with greater efficiency and less data usage. This has positive implications for various projects across the Bitcoin ecosystem, particularly for multi-signature transactions, which will become cheaper and more private.
 

The upgrade was widely supported by the community, with over 90% of miners signaling their support by June 2021. A programmed waiting period between the lock-in and activation gave node operators and miners ample time to upgrade to the latest version of Bitcoin Core, 21.1, which contains the merged code for Taproot.