What's up with the Taproot update?

Taproot is a very big update to the entire Bitcoin network, which is able to add privacy to Bitcoin, among other things. Layers such as lighting network, Liquid and other sidechains use scripts such as MultiSig, Hash Locks and other tools to secure the system. Before, you had to put them on a chain and expose it to the whole network. With Taproot, this information no longer needs to be exposed all the time.

Transactions such as open lighting channels can look exactly like normal transactions. So these changes will not only benefit the lighting network, but all as Bitcoin's general anonymity set, then chain analysis becomes even more difficult.

As less information will be disclosed, transactions will use less data and therefore network fees will decrease. This also means that more transactions will enter each block and each inefficient output transaction (UTXO) will become more efficient. Then there's the Point Time Lock Contracts (PTLC) feature, which is a change for the Lightning network and allows developers to build more complex applications on the Lighting layer as well as discrete log contracts, locked payments, and more. I will add that currently Bitcoin uses a Curve Elliptical Digital Signature and Algorithm (ECDSA) to sign transactions, but Taproot adds a new way to sign Schnorr. The Schnorr signature will optimize and save transaction space and will become faster to verify, so running a full node will be easier and resource intensive with the same transaction throughput. Most importantly, Taproot leaves the door open for further improvements and updates in the future.