Improvement of Privacy: Taproot makes all transactions look the same to external observers. Whether it's a complex contract or a simple payment, they all appear as standard transactions. This enhances privacy by making it more challenging to differentiate between transaction types.

Enhanced Flexibility with Smart Contracts: Taproot introduces the ability to write more complex "scripts" or smart contracts in Bitcoin. This adds functionality without making the blockchain more cumbersome. It's done through a technology called Schnorr signatures, which allow for various conditions to be met for a transaction to be valid.

Efficiency and Cost Reduction: By combining the public keys, Taproot ensures that complex transactions require less space on the blockchain. This means that transactions can be processed more quickly, reducing fees and making the network more efficient.