A Taproot address is a Bitcoin address that starts with bc1p. Introduced with the Taproot upgrade activated in November 2021, it is currently the newest type of Bitcoin address. It uses Schnorr signatures, so it can be spent with a single key signature like an ordinary address, or it can embed multiple backup spending conditions, with only the one actually used revealed on-chain.
How Do You Identify a Taproot Address?
Taproot addresses start with bc1p, are 62 characters long, and consist entirely of lowercase letters and digits. They belong to the same family as SegWit addresses starting with bc1q: p denotes witness version 1 and q denotes version 0. The difference is that Taproot addresses use the Bech32m checksum algorithm and contain a 32-byte public key directly rather than a hash of the public key.
What Is the Difference Between the Key Path and the Script Path?
A Taproot address can be spent in two ways. The key path produces a Schnorr signature directly with the key behind the address, leaving only a 64-byte signature on-chain, indistinguishable from a single-signature transfer. The script path reveals just one condition from a predefined script tree, such as “signed by a backup key after three months,” along with data proving it belongs to the tree, while the other conditions are never disclosed.
The usual design puts everyday spending on the key path and backup and emergency plans on the script path. Because unused conditions are never revealed, this structure also makes multisig and complex scripts harder to identify, improving Taproot’s transaction privacy.
How Do Taproot Addresses Compare on Fees and Compatibility?
When spent via the key path, a Taproot input needs only a signature and no public key, making it smaller than a native SegWit input. However, a Taproot output contains a 32-byte public key, making it slightly larger than a bc1q output. Overall, fees are similar for single-signature use, while Taproot has a clear advantage for multi-party signing, since only one signature appears on-chain no matter how many parties take part.
Compatibility is currently the biggest concern. Some wallets, exchanges, and payment systems still do not support sending to bc1p addresses, so before receiving funds, it is best to confirm that the payer can send to one.
How Does Taproot Affect Multisig and MPC?
Schnorr signatures are linear: multiple public keys can be aggregated into one, and signatures from multiple parties can be combined into one. This lets jointly controlled funds be spent via the key path, without outsiders being able to tell how many people are involved or what the threshold is.
For MPC, this means threshold Schnorr signatures can be used directly on Bitcoin, with a simpler protocol than threshold ECDSA. Businesses considering Taproot addresses need to confirm that their wallet and custody solutions support Taproot signing, and that their withdrawal systems support sending to bc1p addresses.
Conclusion
Taproot addresses start with bc1p, use the key path for spending as simple as a single signature and the script path to keep flexible backup conditions, and are cheaper and more private for multi-party signing. Before adopting them, businesses should confirm that both their signing and withdrawal systems support them. Safeheron’s MPC Wallet-as-a-Service provides businesses with MPC key management and a policy engine.
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