Schnorr Signatures vs ECDSA in Bitcoin: What Changed After Taproot

Before Taproot, every Bitcoin transaction looked the same: a bunch of numbers and letters that proved you owned the coins. But behind those numbers was a 15-year-old cryptographic system called ECDSA - and it had serious flaws. In 2021, Bitcoin quietly switched to a better system: Schnorr signatures. If you’ve ever wondered why Bitcoin transactions got smaller, cheaper, and more private, the answer isn’t a new layer or a sidechain. It’s the signature underneath.

Why ECDSA Was Bitcoin’s First Choice

When Bitcoin launched in 2009, it used ECDSA - the Elliptic Curve Digital Signature Algorithm - because it was proven, widely understood, and free to use. But it wasn’t chosen because it was the best. It was chosen because Schnorr signatures were still under patent.

Claus-Peter Schnorr invented his signature scheme in the 1980s. For decades, anyone who wanted to use it had to pay licensing fees. That’s why the U.S. government created DSA, and later ECDSA, as alternatives. Bitcoin inherited ECDSA not because it was superior, but because it was the only option that didn’t require legal paperwork.

ECDSA signatures in Bitcoin are 70-72 bytes long. Public keys are 33 bytes. Each signature has to be encoded in a complex format called DER, which adds overhead. That might not sound like much, but multiply it by millions of transactions, and you’re talking about wasted space on the blockchain.

What Makes Schnorr Signatures Different

Schnorr signatures are simpler mathematically. Where ECDSA uses a non-linear equation that’s hard to verify efficiently, Schnorr uses a linear one. That might sound like a boring detail, but it changes everything.

A Schnorr signature is always exactly 64 bytes. Public keys are 32 bytes. No DER encoding. No extra padding. Just clean, compact data. That’s a 6-9 byte saving per signature - and in Bitcoin’s world, every byte counts.

But the real win isn’t size. It’s what you can do with multiple signatures.

Key Aggregation: The Game-Changer

Before Schnorr, multisig transactions were a mess. If you wanted to require 2 out of 3 signatures to spend Bitcoin, you had to list all three public keys and all signatures in the transaction. That made the transaction big, expensive, and obvious. Blockchain analysts could easily spot multisig wallets - and track who was involved.

Schnorr changes that with key aggregation. Using MuSig, multiple parties can combine their public keys into one single public key. Then, they generate one single signature that proves all of them agreed. To the blockchain, it looks like a regular, single-signature transaction.

Imagine sending Bitcoin from a corporate wallet that needs approval from three people. With ECDSA, that transaction reveals all three keys. With Schnorr, it looks like it came from one person. No one can tell it was a group effort. That’s privacy by design.

Security: Simpler Proofs, Fewer Bugs

ECDSA has a reputation for being tricky to implement correctly. One small mistake in nonce generation - the random number used to create a signature - can leak your private key. That’s happened before, on other blockchains.

Schnorr signatures are mathematically cleaner. Their security proof is straightforward. They’re non-malleable by default. That means no one can tweak your signature to make it look like it signed a different message. ECDSA signatures could be altered without breaking them - a problem Bitcoin had to fix with additional rules.

Also, Schnorr doesn’t need key prefixing - a workaround ECDSA uses to prevent certain attacks. Less complexity means fewer bugs. Developers who’ve switched report fewer edge cases and clearer documentation.

Speed and Efficiency: Faster, Smaller, Cheaper

Verification speed for Schnorr is about 15% faster than ECDSA. That might not sound like much, but when you’re verifying thousands of transactions per second, it adds up.

The real advantage shows up in batch verification - when a node checks dozens or hundreds of signatures at once. ECDSA has to verify each one separately. Schnorr can combine them into one mathematical operation. That cuts verification time dramatically.

On-chain efficiency? Bigger savings. A 2-of-3 multisig transaction with ECDSA might take 200+ bytes. With Schnorr, it’s under 100 bytes. That means lower fees and more room for other transactions.

Lightning Network channels, which rely on frequent updates, benefit massively. Fewer bytes per update = fewer fees over time.

Privacy: No More Fingerprints

Bitcoin’s blockchain is public. Anyone can see who sent what to whom. But with ECDSA multisig, you can’t hide the structure. If a wallet has five public keys and requires three signatures, the blockchain tells you exactly that.

Schnorr hides that. A 3-of-5 multisig looks identical to a single-key wallet. You can’t tell how many people were involved. You can’t tell which ones signed. You can’t even tell if it was multisig at all.

This isn’t just about privacy for individuals. It’s about institutional adoption. Hedge funds, exchanges, and custody providers don’t want their spending patterns exposed. Schnorr makes that possible without complex obfuscation tricks.

What About the Old System?

ECDSA isn’t gone. It’s still supported. All existing wallets and transactions still work. The Taproot upgrade didn’t break anything. It just added a better option.

New wallets are starting to default to Schnorr. Software like Bitcoin Core, Wasabi Wallet, and Sparrow Wallet now fully support it. Hardware wallets like Ledger and Trezor added Schnorr support in 2023.

But adoption isn’t instant. Many users still use old wallets that only generate ECDSA signatures. Until everyone upgrades, you’ll see both types on the chain. But the trend is clear: new transactions are increasingly Schnorr.

The Future: Beyond Single Transactions

Schnorr isn’t just about better signatures. It’s about enabling new protocols.

Researchers are exploring signature aggregation across multiple transactions - meaning you could bundle dozens of payments into one proof. Imagine a merchant receiving 100 small payments in a day, and only one signature on-chain to verify them all. That’s possible with Schnorr.

Threshold signatures - where you need any 3 out of 5 keys to sign - are also getting easier. That’s huge for enterprise custody. No single point of failure. No need to trust one person with the whole key.

Other blockchains are watching. Ethereum is testing Schnorr for future upgrades. Solana already uses it. Bitcoin’s move isn’t just an improvement - it’s a blueprint.

Why This Matters to You

If you hold Bitcoin, you’re already benefiting. Lower fees. Faster confirmations. More privacy. You might not see it, but your transactions are now smaller, cleaner, and harder to trace.

If you’re building on Bitcoin - a wallet, an exchange, a payment processor - Schnorr gives you tools to reduce costs and improve user experience. No more bloated multisig. No more exposing your security structure.

And if you’re worried about security: Schnorr doesn’t weaken Bitcoin. It strengthens it. The same math that made ECDSA secure now works better, cleaner, and with fewer risks.

The shift from ECDSA to Schnorr wasn’t flashy. No hard fork. No drama. Just quiet, careful engineering. But it’s one of the most important upgrades Bitcoin has ever had.