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Taproot (BIP-340/341/342)

   
Year 2021
Type Soft fork (MASF via Speedy Trial)
BIPs BIP-340, BIP-341, BIP-342
Status Active

What it does

  • BIP-340 (Schnorr signatures): Replaces ECDSA with Schnorr for key-path spends. Enables signature aggregation and simpler multisig.
  • BIP-341 (Taproot): Combines pay-to-pubkey and pay-to-script into a single output type. Simple spends look identical to complex ones on-chain.
  • BIP-342 (Tapscript): Updated script rules for Taproot outputs, including new opcodes and limits.

Why it mattered

  • Privacy - Multisig, timelocks, and simple payments all look identical on-chain
  • Efficiency - Schnorr signatures are smaller and allow batch validation
  • Flexibility - MAST (Merkelized Alternative Script Trees) enables complex contracts where only the executed branch is revealed
  • Future-proofing - Clean upgrade path for new opcodes via Tapscript versioning

How it activated

Used “Speedy Trial” (BIP-8 variant): miners had a 3-month window to signal at a 90% threshold. If reached, rules would lock in and activate after a delay. If not, the community would consider alternative activation.

Miners reached 90% signaling in June 2021. Taproot activated at block 709,632 on November 14, 2021.

Outcome

Smooth activation, no chain split. Adoption is growing as wallets add Taproot support. The activation debate (around LOT=true vs LOT=false and Speedy Trial) was more contentious than the fork itself.