Thread by @gosatsapp

With Block 709632 being mined, #Bitcoin Taproot upgrade just went live.

So, what is #Taproot? Why is this a significant upgrade?

Here’s a thread on everything you need to know
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4 years since the SegWit upgrade paved the way for the Lightning Network, Taproot is a significant upgrade to Bitcoin.

This consists of three major Bitcoin Improvement Proposals (BIP) - intended to improve the privacy, security and scalability of the Bitcoin Network.

These are:
•BIP-340 - Schnorr Signatures
•BIP-341 - Taproot
•BIP-342 - Tapscript

The first - BIP340, upgrades Bitcoin’s core cryptography by integrating the more secure and lightweight Schnorr digital signature scheme in parallel with its existing scheme - the Elliptical Curve Digital Signature Algorithm (ECDSA).

To put it simply, the digital signatures of multiple entities can now be combined into a single complex bitcoin transaction to create one aggregated private key.

This saves block space, improves privacy, and enables faster transaction verification.

The second - BIP 341, also known as “Taproot” specifies the rules for the new Pay-to-Taproot (P2TR) output type, which upgrades SegWit v0 to v1 to accept Schnorr signatures.

Importantly, Taproot implements Merklized Abstract Syntax Trees (MAST) - a privacy solution using Merkle trees - a data structure that enables only executed conditions of a transaction to be committed to the blockchain rather than the full details of all other possible outcomes.

To put it simply - Taproot basically builds on the Segwit upgrade to improve privacy, lower transaction fees, and expand upon scaling solutions such as Bitcoin’s lightning network.

The third - BIP 342 - known as Tapscript - updates the script coding language used to write Bitcoin transaction parameters in order to accommodate Schnorr and Taproot technology for those who opt-in to the upgrade.

It also makes future updates to Bitcoin easier.

What does all this mean?

Taproot allows standard single-signature (single-sig) transactions, multi-signature (multi-sig) transactions & complex smart contracts to look identical on the blockchain.

This improves user privacy, network scalability, and fungibility of all bitcoin.

Users will enjoy cheaper transaction fees and the ability to conduct multi-sig transactions and create complex smart contracts with the same efficiency, low fees, and privacy as single-sig transactions.

Taproot is arguably the most significant Bitcoin upgrade to date, empowering users and giving developers an expanded toolbox as they continue to #BUIDL on Bitcoin.

Taproot is expected to roll out the red carpet for vast innovation and further adoption in Bitcoin.

If you enjoyed this thread and want more people to know what all the fuss about Taproot on Crypto Twitter is, please do like and RT the first tweet in this thread.

And, do consider giving us a follow @gosatsapp to keep yourself updated on all things #Bitcoin.