What Is Taproot and How It Will Benefit Bitcoin

Bitcoin has had its ups and downs, but it has proven to be the anchor that keeps the crypto-verse in firm standing. Regardless of the issues that have popped up over the years, like the Mt. Gox hack or the infamous Bitcoin hard forks, the crypto community has stood by Bitcoin.

But there are certain issues that can’t be overlooked – one of the biggest being that of privacy. With Bitcoin being a public blockchain, anyone can monitor the transactions that occur on the network. For some, that’s a major concern.

It’s possible to increase your anonymity through techniques such as coin mixing and CoinJoins. Unfortunately, however, none of these make Bitcoin a private currency. While that can’t be said for Taproot either, it may help increase anonymity on the network.

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.

How will Taproot benefit Bitcoin?

As we’ve already discussed, Taproot will bring major improvements to Bitcoin’s privacy. When combined with Schnorr signatures, Taproot may also boost efficiency when performing transactions. Besides enhanced privacy, other potential benefits include:

• Reduced amount of data to be transferred and stored on the blockchain.
• More transactions per block (higher TPS rate).
• Lower transaction fees.