The pull request was originally created by Bitcoin Core contributor Pieter Wuille on September 13th and has gone through extensive review and testing over the past month. Over 150 developers also participated in a 7-week review club for the proposal which was led by Anthony Towns back in November of 2019.
This upgrade has been highly anticipated due to its potential to increase Bitcoin’s smart contract capabilities while simultaneously benefiting its transactional privacy.
Schnorr is an alternative algorithm to ECDSA, which is currently used to generate cryptographic signatures. Schnorr signatures would enable the flexible creation and execution of multisignature transactions by combining signatures. This provides added privacy, as multisignature transactions would become indistinguishable from regular Bitcoin transactions.
Taproot is the specific method in which Schnorr signatures will be leveraged to realize a privacy-preserving smart contract solution. It was first proposed by former Blockstream CTO Gregory Maxwell in the Bitcoin-dev mailing list. Since then, several iterations have taken place, leading to the pull request that was merged today.
Momentum is quickly picking up for Schnorr and Taproot. The merge comes only one month after Schnorr was added to the Bitcoin Core libsecp256k1 library, as the BTC Times previously reported.
The next step will be to discuss how to activate Schnorr and Taproot on Bitcoin’s mainnet. Currently, there are two soft fork proposals that have been widely discussed: BIP8 and Modern Softfork Activation.
BIP8 would force the activation of Taproot after a signaling period for miners. The proposal was slightly modified from BIP9, which would require a 95% supermajority, resulting in a potential attack vector for a small minority of miners to halt the entire process.
The Modern Softfork Activation is a significantly more complicated and extensive method of activation, which allows for a 12-month signaling period followed by a six-month discussion period as well as the potential to initiate a BIP8-type activation method over a 24-month period.
At this point, there is no fixed timeline with regards to the implementation of Schnorr and Taproot. Discussion regarding the upgrade's integration is currently taking place in the #taproot-activation channel on IRC.