Taproot is a proposed upgrade to the Bitcoin protocol that seeks to improve the privacy, scalability and security of Bitcoin transactions. Taproot brings a layer of privacy and smart contract-like technology to the Bitcoin blockchain by leveraging a new cryptographic technique called a “Merkle tree”.
This new type of tree structure allows multiple parties to securely collaborate on a single Bitcoin transaction by enabling them to sign and unlock certain parts of the transaction. Taproot uses “Merkle proofs” to enable the creation of secure smart contracts on the Bitcoin blockchain.
This new feature allows users to create complex contracts that require multiple signatories to unlock certain parts of the transaction or to use certain parts of the transaction in order to execute it correctly. For example, with Taproot, a multi-signature contract can be created which will require multiple parties to sign off on the transaction before it can be executed.
Combined with Schnorr signatures and other cryptographic innovations, Taproot promises to bring an unprecedented layer of privacy, scalability and security to Bitcoin transactions. This upgrade is an exciting development for the Bitcoin community, as it will enable a wide range of new use cases and secure collaboration between parties who would otherwise not trust each other.
In addition, it will offer a much needed layer of privacy for Bitcoin users, shielding their transactions from potential surveillance tools.