Bitcoin is set to undergo a major network upgrade, Taproot, in nearly two days, i.e., on Nov. 14 or 255 blocks later, as per data from Taproot.watch. This is the first significant upgrade since the Segregated Witness (SegWit), which eventually culminated in the development and launch of the Lightning Network in 2018. The original Taproot proposal was made by Bitcoin core contributor and former Blockstream chief training officer Gregory Maxwell on Jan 23, 2018. While the previous SegWit upgrade was aimed to resolve transaction malleability and improve the scalability of the Bitcoin network, the Taproot upgrade is targeted to improve transaction efficiency, the privacy of the network, and its ability to support smart contract initiatives. The upgrade was set into motion only after attaining a 90% consensus among the Bitcoin mining nodes on June 12, as announced by Bitcoin developer Hampus Sjöberg on Twitter. Sjöberg also made the Taproot.watch website to track the updates for the Taproot upgrade. Ben Caselin, head of research and strategy at AAX, a cryptocurrency exchange, told Cointelegraph, “The Taproot Upgrade coming to Bitcoin is among the most impactful changes to be implemented on the network. The upgrade brings smart contract functionality to the protocol, and it optimizes for cost efficiency and privacy.“ He also noted that the smart contract functionality coming to Bitcoin is significant even though there are so many high-performing protocols that are functioning already, stating “we have to remember that Bitcoin is the only truly non-sovereign network that offers the highest degree of network security on the planet.” The soft fork will introduce the Merkelized Abstract Syntax Tree (MAST). This tree will introduce a condition that will allow the sender and receiver of the transaction to sign off on a transaction together for settlement. Merkle trees are an established compact complex data structure that was invented by Ralph Merkle, one of the inventors of public-key cryptography. Currently, Bitcoin uses the pay to script hash (P2SH) that ensures that only a hash of the script is going on-chain. Thus, when tokens are being spent, the underlying technology makes it necessary to show all the possible conditions which could’ve been fulfilled, including those that weren’t met in the transaction. The downside to this is that it is very data-heavy, which is unnecessary, and it’s not ideal for privacy as anyone on the blockchain can investigate which ways the funds could’ve been spent, the kind of wallet being used, and possibly more of such details. MAST ensures that the various conditions in which the funds can be spent are hashed individually and included in a Merkle Tree that will produce a Merkle root, which is a single hash. This ensures that only conditions which are met would need to be revealed, thus making the network more data-efficient than the previously used P2SH contracts. Additionally, the Taproot upgrade will bring in the Schnorr Signature. This algorithm will allow users to aggregate multisigs into one for a single transaction, making it difficult to differentiate between regular transactions and multisig transactions. Essentially, these signatures hide if there is a MAST structure that existed from the token or transaction at any time at all. Igneus Terrence, head of communications at Bybit, a cryptocurrency derivatives exchange, spoke with Cointelegraph on the specifics of this upgrade: