What is Taproot, the next Bitcoin upgrade?

With more than $1 trillion of market value currently riding on the Bitcoin network, upgrades to the protocol need to be carefully tried and tested. Taproot is arguably the most important and anticipated upgrade to the Bitcoin network since Segwit.
Source: @therationalroot

The Segwit upgrade in 2017 was a controversial upgrade that would divide the community and spawn the Bitcoin Cash hard fork. The fact that Taproot is almost unanimously supported highlights just how significant this coming upgrade is.

The Taproot upgrade that goes live on November 14 is comprised of three Bitcoin Improvement Proposals (BIPs) which describe three distinct upgrades to the Bitcoin protocol: Schnorr Signatures, Taproot, and Tapscript. Together, these upgrades are known as the Taproot upgrade– introducing more efficient and private ways of transacting with bitcoin.

TL;DR: Taproot is a proposed upgrade of the Bitcoin protocol that promises increased privacy of multi-signature (multi-sig) transactions and to unlock the potential for smart contracts to run on the Bitcoin network. The Taproot upgrade is comprised of Schnorr Signatures, Taproot, and Tapscript, which will make smart contracts on Bitcoin more private and space-saving by aggregating multiple signatures and output them as a single signature.

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