Since Bitcoin (BTC) underwent its Taproot upgrade in November 2021, the amount of the flagship cryptocurrency on its Pay-to-Taproot (P2TR) outputs has been increasing, moving in a gradual uptrend since March 2022.
As it happens, these stores have grown to now hold 11,740 BTC or 0.06% of all BTC supply in existence, according to data from Coin Metrics ‘State of the Network’ newsletter published on August 9.
Taking into account the price of Bitcoin at press time – $23,057, according to CoinMarketCap – this means that nearly $271 million in the maiden token currently occupies the Taproot outputs.
Adoption is slow but sure
As the report states:
“In aggregate BTC terms, this is small but historically the adoption rate of Bitcoin upgrades has been slow to start.”
In addition, to drive the point home, the report also compared the Taproot data with that from an earlier major upgrade – segregated witness transactions (SegWit) implemented with an aim of changing the transaction format and payment batching, as well as enabling the Lightning Network and larger block sizes.
Indeed, according to the newsletter:
“After a few years of stalled adoption, SegWit use now accounts for over 80% of transactions.”
What is Taproot?
As a reminder, the Taproot upgrade was officially deployed in November 2021 via a soft fork with an aim to introduce major technical benefits to the network, including increasing its security, privacy, and efficiency.
It followed the “last civil war” upgrade of 2017 and was implemented together with the Schnorr signatures upgrades, allowing for a much-anticipated feature called signature aggregation and consolidating all types of BTC transaction outputs into a singular Taproot output.
On top of that, the Taproot update includes improved scalability, better utilization of the Lightning Network, and reduced fees for using the Bitcoin network, thanks to further reducing the block space.
Finally and most importantly, this upgrade has laid the foundation for future critical updates on the Bitcoin network.
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