The much-awaited Schnorr and Taproot proposals were implemented to Bitcoin Core earlier today, as per commit history available on open-source platform GitHub. When activated, they will bring about better transactional capabilities to Bitcoin while increasing the network’s privacy features.
The update’s pull request—which invites Bitcoin developers to review code before it is fully released—was first posted in September by Bitcoin developer Pieter Wuille and has since undergone over a month of testing. The Taproot proposal alone saw over 150 developers reviewing the code.
Schnorr signatures and Taproot, formally the Bitcoin Improvement Proposals (BIP) 340 and 341, are two of the biggest changes to Bitcoin since the activation of Segregated Witness (SegWit)—an implementation which increased Bitcoin’s blocksize limit—in 2017. Schorr itself is based on the SegWit mechanism.
The activation mechanism for the three BIPs has not been decided yet. Depending on the mechanism chosen, it might take some time, perhaps a year, before the code is activated.
Schnorr is an alternative to Bitcoin’s current multisignature wallet mechanism, which, as the name suggests, uses multiple private keys to facilitate a transaction from a Bitcoin wallet. However, the Schnorr update combines multiple keys to a single key when a user transacts using Schnorr. This significantly reduces the data size of multisig payments and helps decongest the network.
Taproot takes Schnorr further by introducing a new transaction output version and new ways for users to define conditions for when they spend Bitcoin, with one advantage that of even allowing users—under very certain conditions—to regain access to their lost coins. This improves the flexibility of Bitcoin as a monetary network
The features of Schnorr and Taproot are helpful for users with complex spending policies which typically control huge funds, such as crypto exchanges.
The Bitcoin network rarely undergoes such big changes, but this shows that while the network is progressing slowly—it's still innovating.
Update: The spelling of Schnorr has been fixed.