Taproot

Taproot bundled three proposals, BIPs 340, 341 and 342. It introduced Schnorr signatures, which allow several signers to produce a single combined signature, and a way of committing to a set of spending conditions in which only the condition actually used is revealed on-chain. When all parties cooperate, a multisig or contract spend can look like an ordinary single-signature payment.

It activated as a soft fork in November 2021 at block 709,632, after miners signalled support through a process known as Speedy Trial. Taproot addresses start with bc1p. The upgrade also relaxed limits on witness data, which later made Ordinals inscriptions possible, an outcome few had anticipated.

Its privacy and fee benefits arrive only as wallets and services adopt it, and adoption has been gradual. The extra room for arbitrary data is also controversial among users who see inscriptions as spam competing with payments for block space.