The fundamental aim of Bitcoin blockchain is to ensure decentralized private transactions amongst two parties with minimal transaction fees. With the ever increasing popularity and number of daily transactions this is getting tougher as a lot of information has to be stored .This can be solved by either increasing the blocksize or reducing the transaction size. Taproot is focused on improving Bitcoin Blockchain efficiency by reducing transaction size.
Taproot, schnorr signatures and new Merkle branches update is the BIP (Bitcoin improvement Proposal) 341 suggested by Pieter Wuille , Jonas Nick and Anthony Towns . Currently the Bitcoin Blockchain uses the Elliptical Curve signature mechanism and this proposal suggested to use Schnorr signatures. The advantage of this is that Schnorr signatures use less storage size and ensure better privacy as compared to Elliptical Curve signatures.
The implementation of Taproot will enhance network privacy. This implementation will avoid all the conditions from being exposed while it only exposes the final activated condition of the transaction. Along with this, Taproot will represent such transactions as normal or conventional, where it becomes impossible to distinguish them from each other.
Schnorr signatures allow better privacy for transactions. It helps multiple signatures to be combined in 1 and allow efficient use of blockchain.
Crypto community have shown by and large consensu to signal activation of Taproot unlike the SegWit upgrade where the opinions were distributed. In order for Taproot to be successful, 90% of the threshold has to be achieved before the timeout. If this doesn’t happen then the softfork is deemed as unsuccessful and it has to be redone. Besides segwit, most of the previous softforks got activated at their initial phase itself and where more than 95% of the miners had to signal it. For this one though only 90% of the miners have to signal it and hence it is expected to be completed early itself.
In essence, the whole BIP 0341 is extremely useful for reducing transaction costs, improving privacy and making bitcoin blockchain more efficient. Thus, many mining pools have started signaling for Taproot and very shortly we would expect to see the softfork to be completed.
