Taproot Transaction Privacy

Taproot is Bitcoin's November 2021 upgrade that fundamentally changes how transactions are verified and how privacy is handled. It introduces three key mechanisms: Merkle Abstract Syntax Trees (MAST) for efficient conditional spending, Schnorr signatures for smaller signatures and batch verification, and script tapering to make all spending conditions indistinguishable on-chain. When you send a Taproot transaction, observers see only the minimum data needed to verify spending authority. Complex spending conditions, multisig thresholds, time-locks, fallback options, are hidden in the Merkle tree. Only the path used is revealed, keeping alternatives private.