---
title: "How Taproot Adoption Reshapes Network Dynamics"
url: https://diffcoin.com/how-taproot-adoption-reshapes-network-dynamics/
description: "The Ordinals craze served as a major catalyst in increasing Taproot's usage."
published: 2024-01-30
updated: 2024-01-30
author: "Mila"
site: "Diffcoin"
---

# How Taproot Adoption Reshapes Network Dynamics

The Bitcoin network is rapidly evolving, and its on-chain fundamentals have changed completely compared to the last bull run in 2021. The two most important upgrades on the network – Taproot and SegWit – are seeing increased user adoption despite challenges in the market.

- According to an [update](https://twitter.com/ki_young_ju/status/1751921091147350350) by CryptoQuant CEO Ki Young Ju, Taproot adoption soared from 1% to 39% in just a year.
- Meanwhile, SegWit is now prevalent among addresses, revolutionizing on-chain fundamentals since the 2021 bull run. This transformative growth essentially highlighted Bitcoin’s maturation and its readiness for the challenges ahead.
- Segregated Witness (SegWit) is a crucial upgrade that involves a modification in Bitcoin’s transaction structure. Its primary aim as a protocol enhancement was to safeguard against transaction tampering and reduce transaction durations by enlarging block capacity.
- Transaction tampering concerns the potential alteration of transaction details, jeopardizing new blocks.
- SegWit additionally facilitated Bitcoin’s progression towards supporting smart contracts and transitioning to a subsequent iteration, Taproot. Implemented in 2021, this upgrade enhanced transaction handling, rendering it faster and more economical.
- The Taproot upgrade facilitated the development of decent-sized applications (dApps) on the Bitcoin blockchain by enhancing network privacy, scalability, and security.
- With the introduction of novel signature schemes and a versatile transaction framework, the Bitcoin blockchain’s sustainability was bolstered, enabling support for DeFi (decentralized finance) initiatives in the long run.
- In May, 75% of Bitcoin on-chain transactions embraced Taproot, and its adoption surged further in 2023 due to growing interest in Ordinals.

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[Source link](https://cryptopotato.com/completely-different-than-the-2021-bitcoin-bull-run-how-taproot-adoption-reshapes-network-dynamics/)