Bitcoin taproot usage up as tokens like PEPE explode
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On-chain data shows that Bitcoin taproot exploitation has skyrocketed recently as BRC-20 tokens such as Pepe Coin have exploded in popularity.
Bitcoin taproot exploitation has passed the 43% mark recently
As pointed out by Rafael Schultze-Kraft, co-founder of the analysis firm on the chain Glass node, Taproot is currently 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 was initially little used, but in recent months it has been used much more. There are two different metrics available that aim to track the progress of Taproot to acceptance: “adoption” and “exploitation.”
The adoption measures the total percentage of BTC transactions that contain at least one Taproot entry. However, this indicator is not considered the most reliable since it does not contain all the information about the actual use of the upgrade.
This is because even if five out of five inputs to a transfer use Taproot, that transaction’s weight in adoption will still be the same as a transfer that only has one out of five inputs using Taproot.
Glassnode has created the utilization value to solve this problem, and this new indicator tells us how the upgrade is in use by measuring the actual amount of used outputs involving Taproot.
Now, here’s a chart showing the trend in both adoption and usage of this Bitcoin upgrade over the past year:
Looks like both these metrics have shot up recently | Source: Rafael Schultze-Kraft on Twitter
As shown in the graph above, these Bitcoin indicators had been at relatively low levels until February of this year, when their values suddenly began to explode. The reason behind this spike in the Taproot tool was because of the rise of Ordinals.
The Ordinals protocol uses Taproot and has found a number of applications on the blockchain. Thanks to this protocol, a method has been developed to enter data such as images, text, videos and other forms on the network in the form of inscriptions.
The inscriptions have quickly become popular on the blockchain, thus leading to an increase in the use of Taproot. Recently, however, the use of the upgrade has gone up another level, and it’s all because of another use of Ordinals: the BRC-20 tokens.
These tokens use the protocol to write text on the chain that represents a fungible token. These coins work similarly to the ERC-20 tokens on the Ethereum network, although they have many more limitations.
A large amount of BRC-20 tokens have been minted recently, many of which are meme coins. One of the most prominent examples of these is Pepe Coin (PEPE), which has been the talk of the market thanks to its explosive price growth.
As a result of such BRC-20 meme coins becoming very popular recently, Bitcoin Taproot adoption and usage have both increased sharply to 63% and 43% respectively.
BTC price
At the time of writing, Bitcoin is trading around $27,900, down 2% in the last week.
BTC has gone down in the last 24 hours | Source: BTCUSD on TradingView
Featured image from iStock.com, charts from TradingView.com, Glassnode.com
