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Taproot Adoption Reaches Record High, Boosting Bitcoin Transaction Efficiency

A recent report from Glassnode reveals that the adoption of Taproot, a major upgrade to the Bitcoin network, has reached record highs. According to Glassnode, a staggering 75.77% of Bitcoin on-chain transactions utilized Taproot on May 7, compared to just 1.536% at the beginning of the year. This increase in adoption is good news for the Bitcoin network as it means that block sizes are increasing, resulting in a reduction in transaction costs.

Source: Glassnode

However, the increase in Taproot adoption has also led to a surge in demand for block space, as more users are making use of the network. Glassnode reports that Bitcoin is experiencing extremely high demand for block space, driven by BRC-20 tokens, text-based inscriptions, and ordinals.

This high demand for block space has resulted in a revenue boost for Bitcoin miners. The average fee paid per block has reached 2.905 BTC, which is near past bull peaks. This is a significant increase from the average fee paid per block in January 2021, which was just 0.000262 BTC.

The rise in transaction fees is a testament to the growing popularity and adoption of Bitcoin. The surge in demand for block space is an indication that the network is being used more frequently for a range of transactions, including BRC-20 tokens, text-based inscriptions, and ordinals.

Bitcoin’s Taproot upgrade is a significant milestone for the network as it brings a host of benefits, including increased privacy, scalability, and flexibility. Taproot is an upgrade that has brought several new features and benefits to Bitcoin users, which was activated by the Bitcoin community at block 709,632 on November 12th, 2021.

Comprising three distinct upgrades to the Bitcoin protocol, known as Bitcoin Improvement Proposals (BIPs), Taproot includes Schnorr Signatures (BIP 340), Taproot (BIP 341), and Tapscript (BIP 342). Together, these BIPs have introduced more efficient, flexible, and private ways of transferring bitcoin, making the Taproot upgrade a significant development for the cryptocurrency.

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