Taproot (BIP 341) brought tapscript to Bitcoin’s scripting system. With its new Tapscript and Schnorr signatures, Bitcoin transactions became more compact, allowing for complex scripts and reducing transaction sizes. This enabled the inscription of arbitrary data onto “individual satoshis”, which is the core of Ordinals.

Before Taproot, embedding arbitrary data directly on the blockchain wasn’t practical. But with Taproot BIP-341, it became possible to store data like images or text taking up block space meant for transactions. This opened the door for “Bitcoin-based NFTs” and other data-driven use cases. Without Taproot; ordinals wouldn't exist.

The 2nd and 3rd order effects of major bitcoin “upgrades” have implications that can have unintended outcomes that affect everyone.