Bitcoin Taproot Utilization Spikes As Tokens Like PEPE Explode

On-chain data shows that Bitcoin taproot utilization has sharply surged recently as BRC-20 tokens like Pepe Coin have exploded in popularity.

Bitcoin Taproot Utilization Has Crossed The 43% Mark Recently

As pointed out by Rafael Schultze-Kraft, the co-founder of the on-chain analytics firm Glassnode, Taproot is currently being used in more BTC transactions than ever before. “Taproot” refers to a Bitcoin upgrade that went live in November 2021 and introduced some changes to make transfers more efficient and faster.

The upgrade initially saw little usage, but in the last few months, it has been coming in use a lot more. There are two different metrics available that aim to track the progress of Taproot being accepted: the “adoption” and the “utilization.”

The adoption measures the total percentage of the BTC transactions that contain at least one Taproot input. This indicator, however, isn’t considered the most reliable as it doesn’t contain the entire information about the actual adoption of the upgrade.

This is because even if five out of five inputs to a transfer use Taproot, this transaction’s weightage in the adoption will still be the same as a transfer that has only one out of five inputs that use Taproot.

Glassnode has made the utilization metric to solve this issue, and this new indicator tells us how in-use the upgrade is by measuring the actual amount of spent outputs that involve Taproot.

Now, here is a chart that shows the trend in both the adoption and utilization of this Bitcoin upgrade over the last year:

Looks like both these metrics have shot up recently | Source: Rafael Schultze-Kraft on Twitter

As shown in the above graph, these Bitcoin indicators had been at relatively low levels until February of this year, when their values suddenly started to blow up. The reason behind this spike in Taproot utility was because of the emergence of Ordinals.

The Ordinals prot

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Author: Hououin Kyouma

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