Bitcoin's block size, hardcoded at 1MB, has been limited by the capabilities of its weakest full nodes. The block size limits the number of transactions on the blockchain outside of Layer 2 solutions, increasing fees. Fewer people using their own full nodes makes Bitcoin less decentralized. However, if the weakest full nodes can process larger blocks, Bitcoin can safely increase its block size without losing decentralization. How will upgrades to Bitcoin such as Taproot help allow increase of block sizes?
Belcher told CoinDesk that Schnorr signatures will also enable “batched validation” wherein a Bitcoin full node could “validate 1,000 Taproot signatures in nearly the same time it takes to validate one [ECDSA] signature.” -- How Bitcoin’s Taproot Upgrade Will Improve Technology Across Bitcoin’s Software Stack
If the above quote is true, then it will take much less CPU power to verify a block. That could potentially allow the least powerful full nodes of the network to process larger blocks, which would help Bitcoin scale without sacrificing decentralization.
If the limiting factor that prevented Bitcoin's least powerful full nodes from increasing block size was bandwidth (kilobits per second), then this upgrade won't allow Bitcoin to increase its block size.
A Bitcoin node must receive a block then verify it before retransmitting it. If it takes less CPU power to verify, it might also mean blocks can propagate through the network faster.
There might also be other upgrades that can improve block propagation time. What are they?
Satoshi Nakamoto once said:
Bitcoin can already scale much larger than that with existing hardware [..] By Moore's Law, we can expect hardware speed to be 10 times faster in 5 years and 100 times faster in 10. Even if Bitcoin grows at crazy adoption rates, I think computer speeds will stay ahead of the number of transactions.