The Core Issue: Why Bitcoin Needed A Remodel With Segwit and Taproot

Segregated Witness (SegWit) and Taproot represent the largest changes to the Bitcoin protocol, fundamentally restructuring transactions and scripting to overcome inherent limitations. SegWit addressed transaction ID malleability by separating signature data into a 'witness' field, which was crucial for enabling second-layer scaling solutions like the Lightning Network that rely on pre-signed transactions. This change also introduced a witness commitment (WTXID) and allowed for flexible scripting upgrades. Taproot, an evolution of MAST, integrated Schnorr signatures, which are more secure, non-malleable, and enable efficient key aggregation for multisignatures (like MuSig and FROST), overcoming legacy multisig size limits. Taproot also optimized script usage by only revealing the necessary spending path, improving privacy and efficiency over P2SH and MAST. Furthermore, SegWit introduced a witness discount to correct the economic incentive where inputs were disproportionately expensive compared to outputs, promoting responsible UTXO management. Together, these upgrades removed massive roadblocks, giving Bitcoin a chance to scale for self-custodial use.

(Source：Bitcoin Magazine)