Taproot to Enhance Bitcoin Privacy Is Ready for Testing, but Needs Schnorr
Greg Maxwell’s Taproot Privacy Tech Set To Be Released
Bitcoin has been pretty unpopular because of its privacy. As a result of this shortcoming, developers have long been trying to find a fix, or at least improve it over time. To do the same, Greg Maxwell, the ex-CTO of high-profile bitcoin technology startup Blockstream proposed something called Taproot.
In this pursuit, Maxwell published a paper on something called “Taproot” in mid-January, an idea that improves upon the privacy of MAST, an idea, long in the making, that could beef up bitcoin's smart contract abilities. Days later, Maxwell released another proposal called “Graftroot,” improving on MAST further.
To understand MAST, it's helpful to start by looking one of the common use cases of bitcoin today – M-and-N multi-signatures, which require that coins can only be spent if a certain number of users (such as two-of-two, three-of-five) approve the transaction. One problem that can arise in these types of transactions is that one party loses their private key to sign with or just decides altogether not to comply, and at that point the money is unspendable.
The Current State Of Taproot
Far from providing full bitcoin privacy, Taproot's code offers a way to make all transactions on the blockchain look the same to outsiders. Still, chatter about the proposal has arguably faded as other projects caught the community's eye and bitcoin's price tumbled.
The renewed work showcases why many consider Taproot to be a discovery that provides an “enormous privacy win” for bitcoin, as Blockstream co-founder Pieter Wuille put it in a recent talk. Even better, it's actually not a crazy difficult change to make to bitcoin. Test code is already executed, in fact, putting Maxwell's principles into practice.
Despite this, there are things Taproot has to work on most prominent being Smart Contracts. there are a variety of complex transactions used in bitcoin, like the kind that enables the off-blockchain protocol lightning for more scalable bitcoin payments and other complex types that are still in advancement.
Taproot puts an end to that by making these transactions look the same as every other “boring payment,” as Maxwell put it in the technology's announcement post. Yet, it can't do this without Schnorr, an upgrade to bitcoin's signature scheme that's been on developer's coding agenda for years. The signature scheme is supposed to be better than bitcoin's current signature scheme in basically every way. Additionally, it enables Taproot because it allows signature data to be mashed together into one.