Bitcoin Taproot is about to be upgraded in November, a brief explanation of the impact of Taproot

As the originator of the blockchain, the dynamics of Bitcoin has always been the focus of many people. Although in recent years, compared with Ethereum’s various technological innovations, for Bitcoin, Bitcoin-related technological innovations are relatively new. It is still relatively slow, but this does not mean that Bitcoin is stagnant. This month, Bitcoin will usher in another technological change following the Schnorr signature scheme, which is Taproot.

Introduction to Taproot
The concept of Taproot was proposed by Gregory Maxwell in January 2018. The main function is to expand the scripting function of Bitcoin and improve privacy. After studying MAST, Gregory Maxwell found that it can be combined with Schnorr signatures to form a particularly concise output mode. , So some people say that Schnorr signature is actually to lay the foundation for Taproot later.

Taproot upgrade mainly involves 3 technical concepts. Many people regard Taproot upgrade as an application of Merck Abstract Language Tree (MAST), and MAST is related to payment to script hash (P2SH). This part mainly involves P2SH , MAST and Schnorr signatures.

Since this part of the underlying technology is relatively complex and obscure for many people, we only give a brief introduction to P2SH, MAST, Schorr signature and Taproot.

Schnorr signature

Schnorr signatures may be familiar to many people who know Bitcoin. In 2008, when the Schnorr signature patent just expired, the corresponding verification work was not carried out. Therefore, Satoshi Nakamoto did not use the Schnorr signature on Bitcoin, but used the mature elliptic curve signature (ECDSA). It was officially deployed on the Bitcoin blockchain after a few years due to the thorough research of the community.

In simple terms, Schnorr signature is to aggregate multiple signatures in a Bitcoin transaction into one signature, and then only one signature of the verifier is required when the node verifies the transaction. On the one hand, this can greatly reduce the number of bytes occupied by transactions, so that more transactions can be accommodated in the same block size, and on the other hand, it can reduce the consumption of memory resources and improve the efficiency of signature verification.


P2SH (Pay-to-ScriptHash) is a new type of script transaction mode launched in 2012. It allows complex locking scripts to be replaced by their hash values, called redeem scripts or redeem scripts. This way It has a certain similarity with PubKey script. In the transaction output, P2SH can make complex scripts replaced by hash values, which makes the transaction code shorter and reduces the number of transaction bytes. In addition, the burden of building scripts is transferred to the receiver instead of the sender, and only in this transaction. Bitcoin needs to be sent out by the receiver before its public key is disclosed, which also increases privacy to a certain extent.

MAST (Merkel Abstract Syntax Tree)

MAST mainly solves the problem of excessive transaction volume caused by too many scripts in P2SH. The Merck Tree encrypts complex locking scripts. The bottom leaf is a series of scripts that do not overlap each other, so that different transaction execution conditions are triggered separately, without each other. The impact has also further enhanced the function of P2SH, while reducing the transaction size and supporting complex conditions.


Taproot combines Schnorr to make P2SH and common P2PKH technically make them look like a regular transaction in the end, that is, in the final n/m transaction, they behave like a regular P2PKH transaction without having to Disclosure of the underlying MAST, which ensures that the complex script contract is hidden.

It can be seen that the technologies of Schnorr, P2SH, MAST, and Taproot do not exist alone, but a complementary and complete relationship. Therefore, some people combine these technologies for treatment.

Taproot’s impact on Bitcoin
It can be seen that starting from Schnorr, P2SH, MAST, and Taproot have all improved the privacy of Bitcoin transactions. The first is the disclosure of multiple collaborative transactions, the second is the privacy of the transaction script contract MAST, and the third One is that the privacy of different transactions does not affect each other, so from the overall point of view, in the end, what we can see from the chain is an ordinary transaction, and the contract conditions etc. cannot be traced. .

Supervision and crime

On the premise of improving privacy, this will greatly increase the difficulty of tracking transaction funds on the Bitcoin chain at the regulatory level, but we do not need to worry too much about this issue. We all know that in the past few years, countries have made great efforts to combat related cryptocurrency crimes. Some companies that specialize in data on the chain are used to track Bitcoin-related crime funds, such as big data such as Chainalysis. Analyzing companies, etc., they still have a certain role in combating corresponding crimes. The deployment of Taproot will inevitably make it more difficult for them to track funds in the future.

Of course, Taproot only improves privacy. It does not completely turn Bitcoin into an anonymous cryptocurrency. In other words, the openness and transparency of the Bitcoin ledger still exists, but there are more transaction details and details in the transaction process. The conditions may be difficult to find. Too hidden may usher in a regulatory blow like Monero. Of course, too open and transparent, and it will be unfriendly to some users who value privacy, so the privacy performance is selectively improved. For Bitcoin, there are great benefits.

Big data analysis of transactions on the blockchain

Another point is that private transactions are only a small part of illegal fund transfers, and their conditions are relatively strict. In fact, most of the transactions on the chain are still used for the hiding of fund transfers by the main force of market investment institutions, because the blockchain The use scenario of big data companies to track the transfer of illegal funds is still relatively speaking. The number of customers is relatively small. It is actually a dynamic analysis of the capital data on the chain of the main bookmaker, so as to determine the market capital trend, and further respond accordingly. The investment operation of the major investors or the main investors who are mainly bitcoin transactions are to make a profit from the chain data. This is the main business of the big data company on the blockchain.

In the past, when the main force of institutions transferred funds, part of it was through the transfer of large amounts of funds. This method is easier to show the trend of the main funds, and the other part is to transfer through various small funds, through the increase of Bitcoin. Part of the privacy can make it more difficult for such big data companies to analyze the real capital movements of the main force, so as to avoid corresponding troubles in the market.

Transaction fees and average speed

The last point is that the implementation of Taproot and other technologies can reduce transaction volume, reduce transaction fees, and improve transaction scripts to greatly reduce transaction volume. More transactions can be packed in a unit block, and the overall congestion situation can be improved. As the currency price continues to rise, This is very important for Bitcoin. Of course, although the Lightning Network can also greatly reduce transaction fees, the maturity of the Lightning Network requires a longer market for promotion and development. Therefore, for Bitcoin’s first-level transaction , It is still very necessary at present.

Posted by:CoinYuppie,Reprinted with attribution to:
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