Why Are Taproot Smart Contracts More Private? A Non-Technical Explanation

Our exploration of the new superpowers Taproot gives to Bitcoin continues. We defined smart contracts and covered the functionality of the Taproot-enabled ones. To summarize, Taproot gives new characteristics to Bitcoin layer one that enable smart contract expressiveness in layer two solutions. Today, the topic is privacy. What happens on the blockchain stays there forever. With that in mind, these Taproot contracts only reveal absolutely necessary information. In the past, to execute a contract, each and every node of the Bitcoin network had to run it. That left the parties involved in the contract vulnerable and exposed, as Bitcoin Magazine explains. For the Bitcoin network to prosper the developers have to think of every scenario, and this is one. The Taproot upgrade fixes this. Blockstream gives us a slightly more technical explanation, “The innovation of Taproot is to embed the scripting capability, which previously had to be conspicuously opted into by wallet software (for example, to support escrow payments, Lightning HTLCs or multisignature policies), inside the key itself.” This is one of the innovations that’ll help future wallets to function in a lighter and more effective way. Bitcoinist will cover that topic later on. For now, Blockstream informs us that after Taproot. It’s also worth noting that, post-Taproot, it won’t be possible to identify the nature of most transactions. All of them will look the same on the blockchain. Unfortunately, a Reddit user already figured out a way to identify the opening of public Lightning Network channels. In any case, there’ll be more privacy all around the Bitcoin network. As Johnny Lyu, CEO at Kucoin, recently Implied.