Taproot

Taproot is a Bitcoin upgrade that activated on 14 November 2021 at block 709,632, as a soft fork. It bundled three proposals (BIPs 340, 341 and 342) and was the biggest change to Bitcoin since SegWit.

Its centrepiece is Schnorr signatures, a signature scheme that is simpler and more efficient than the ECDSA signatures Bitcoin used before and allows multiple signatures to be combined into one. Taproot also lets complex spending conditions, such as multisig or time-locked recovery paths, be hidden: if everyone agrees, the transaction looks on-chain just like an ordinary single-signature payment, and only the conditions actually used are revealed. This improves privacy and can cut fees for advanced wallets.

Taproot addresses start with "bc1p". An unintended side effect was that Taproot's relaxed limits on witness data made Ordinals inscriptions practical, which led to the wave of Bitcoin NFTs and BRC-20 tokens from 2023.