Taproot is a soft-fork upgrade to Bitcoin activated in November 2021. It bundled three Bitcoin Improvement Proposals (BIPs 340, 341, 342) that improved privacy, transaction efficiency, and smart contract flexibility on Bitcoin's base layer.
Taproot's three main pieces:
The privacy gain is real but subtle: complex contracts (multi-sig, Lightning channels, vaults) now share the same on-chain footprint as ordinary single-signer transactions when they are spent cooperatively. An observer cannot tell which is which without dispute. This breaks the long-standing pattern where every script type had a recognizable on-chain signature.
The efficiency gain is concrete: Taproot transactions are typically 10 to 30 percent smaller than equivalent pre-Taproot transactions, which translates directly to lower fees. Lightning Network channel opens and closes are noticeably cheaper post-Taproot.
Taproot also enabled the Ordinals protocol in early 2023, which writes arbitrary data into Bitcoin transactions. Ordinals were not the goal of Taproot but are a side effect of how Tapscript handles witness data. They have been controversial and have driven significant fee revenue and mempool congestion since launch.
The BTC Network panel on the TerminalFeed dashboard shows live mempool fee pressure, which jumps during Ordinals or BRC-20 token surges (both downstream of Taproot). The Bitcoin Mempool guide covers how to read those fee spikes.