Bitcoin’s signature system just got a major upgrade - here’s what changed

Since Bitcoin launched in 2009, every transaction has relied on ECDSA - the Elliptic Curve Digital Signature Algorithm. It worked. It secured billions in value. But it was never perfect. In 2021, Bitcoin activated Taproot, a soft fork that quietly introduced Schnorr signatures as a new, better alternative. If you’ve ever wondered why Bitcoin transactions got smaller, cheaper, or more private overnight, the answer starts with this shift.

ECDSA and Schnorr aren’t just different versions of the same thing. They’re fundamentally different in how they work, how they scale, and how they protect your privacy. Understanding the difference isn’t just for developers - it affects every Bitcoin user. Whether you’re sending Bitcoin, using a multisig wallet, or running a Lightning node, Schnorr signatures are already changing how the network behaves.

ECDSA: The old workhorse with hidden flaws

ECDSA was chosen for Bitcoin not because it was the best, but because it was available. The original Schnorr patent, filed in the 1980s, blocked its use for decades. So Bitcoin developers went with ECDSA - a derivative of the Digital Signature Algorithm (DSA) - to avoid legal risks.

Here’s what ECDSA looked like in practice:

• Each signature was 70-72 bytes long
• Public keys took up 33 bytes
• Signatures used complex DER encoding, which added overhead and variability
• Transactions with multiple signatures (like 2-of-3 multisig) became bloated - sometimes over 500 bytes

But the bigger problems weren’t about size. ECDSA had malleability issues. Attackers could tweak a valid signature slightly and make it look like a different transaction - even though the same keys still signed it. This forced Bitcoin to add extra checks (like SegWit) just to patch the problem.

Another flaw: ECDSA requires careful nonce generation. If the same random number (nonce) is ever reused across two signatures, your private key can be stolen. There have been real-world breaches because of this - including the infamous 2010 Bitcoin theft from a flawed Android wallet.

Schnorr signatures: Simpler math, stronger results

Schnorr signatures, invented by cryptographer Claus-Peter Schnorr in the 1980s, are mathematically cleaner. Instead of two separate values (r and s) like ECDSA, Schnorr produces one compact 64-byte signature. Public keys? Just 32 bytes - one byte smaller than ECDSA’s, but with no encoding bloat.

The real magic? Linearity. Schnorr signatures can be added together - mathematically. That means if three people sign a transaction, their signatures don’t need to be listed separately. They can be combined into one signature that proves all three agreed.

This isn’t theoretical. It’s called MuSig, and it’s built into Taproot. A 3-of-5 multisig wallet? To the blockchain, it looks exactly like a regular single-signature transaction. No flags. No telltale patterns. No way for observers to know it was a group effort.

Compare that to ECDSA multisig: each signature is listed individually. Blockchain explorers can tell you instantly it’s a multisig. And if you’re using a corporate wallet or a family vault, that’s a privacy leak.

Why Schnorr is faster and cheaper

Speed matters on a blockchain. Every second saved on verification adds up.

ECDSA signature verification takes about 1.1 milliseconds on average. Schnorr? Around 0.94 milliseconds - a 15% improvement. That might sound small, but when the network processes thousands of transactions per block, it reduces latency and improves node synchronization.

But the real win is batch verification. With ECDSA, you verify each signature one by one. With Schnorr, you can verify dozens - even hundreds - of signatures in one go. The math lets you combine them into a single check. This isn’t just faster. It’s exponentially more efficient.

For miners and full nodes, this means lower CPU load. For users? Lower fees. Why? Because aggregated signatures take up less block space. A 2-of-2 multisig transaction that used to be 400+ bytes now fits in under 100 bytes. That’s a 75% reduction. In a world where block space is scarce, that’s massive.

Privacy: The silent revolution

Bitcoin is often called pseudonymous. But in reality, most transactions are easy to trace - especially multisig ones. ECDSA multisig transactions are like a fingerprint: they scream “this isn’t a personal wallet.”

Schnorr changes that. With key aggregation, every multisig transaction looks identical to a single-key transaction. There’s no way to tell if a signature came from one person or ten. This protects users in corporate settings, family trusts, and even crypto-powered DAOs.

It also helps the Lightning Network. Lightning channels rely on complex multisig setups. With Schnorr, channel openings and closures are smaller and more private. That means less data on-chain, fewer fees, and better scalability.

And it’s not just about hiding who signed. Schnorr signatures are non-malleable by design. You can’t tweak them. That removes an entire class of attacks that ECDSA needed workarounds for.

Security: Less complexity, fewer bugs

ECDSA’s security relies on a complicated mathematical structure. That complexity creates more room for bugs. Developers have to handle DER encoding, point compression, signature validation, and nonce randomness - all of which can go wrong.

Schnorr? Simpler. The math is linear. The format is fixed: 64 bytes, no encoding quirks. The specification is cleaner. Fewer edge cases. Fewer ways to mess it up.

Plus, Schnorr doesn’t need key prefixing - a security measure ECDSA requires in some contexts to prevent attacks. That’s one less thing to configure, one less thing to get wrong.

And yes, both rely on the same underlying security: the elliptic curve discrete logarithm problem. Break one, you break both. But Schnorr’s proofs are tighter. Cryptographers trust it more.

Adoption: Where are we now?

Taproot activated in November 2021. Since then, adoption has grown steadily. By early 2026, over 40% of Bitcoin transactions use Schnorr signatures - either directly or through aggregated multisig. Major wallets like Sparrow, BlueWallet, and Ledger now support it. Bitcoin Core fully implements BIP 340, the standard that defines Schnorr in Bitcoin.

ECDSA isn’t gone. It’s still used in older wallets and legacy transactions. But new wallets default to Schnorr. New multisig setups? Almost always use MuSig. Even Bitcoin’s Lightning Network is migrating toward Schnorr-based channel protocols.

Other blockchains are watching. Litecoin, Elements, and some ZK-rollups are testing Schnorr implementations. Bitcoin proved it works at scale - and now others are following.

What this means for you

If you’re a regular Bitcoin user, you probably didn’t notice the change. That’s the point. Schnorr signatures work silently in the background. But here’s what you’re already benefiting from:

• Lower fees on multisig transactions
• More private transactions - no one can tell if you’re using a shared wallet
• Faster confirmation times on busy networks
• Stronger protection against signature tampering

If you’re using a multisig wallet - say, for a business, family, or DAO - you’re getting better security and lower costs than ever before. No more bloated transactions. No more exposing your setup to blockchain analysts.

And if you’re thinking about setting up a new wallet? Go with Schnorr. It’s the default now. ECDSA is the legacy option.

Future possibilities

Schnorr’s linear structure opens doors we’re just starting to explore. Imagine signing multiple transactions at once - one aggregated signature covering dozens of payments. Or threshold signatures where any 3 out of 5 custodians can spend funds, without revealing who signed. Enterprise custody solutions are already testing this.

Researchers are also looking at signature aggregation across entire blocks. What if you could verify all signatures in a block with one mathematical check? That could reduce validation time by 90% - and make Bitcoin even more scalable.

These aren’t distant dreams. They’re built on the same math that made Taproot possible.