Five years after the activation of the Taproot soft fork on November 14, 2021, the protocol has failed to make multisig transactions indistinguishable from standard payments for long-term savings. While Taproot allows complex spending conditions to be hidden within a cryptographic fingerprint, the majority of its usage has been driven by Ordinals and Runes protocols rather than financial transactions.
Data from mid-2026 indicates that Taproot inputs account for 8.1% of network transactions, down from a peak of 75.8% in May 2023. Analysis by UTXOracle shows that 99% of Taproot transactions since 2024 involve amounts between 100 and 1000 satoshis, which are categorized as non-financial 'dust'.
Adoption for savings remains limited due to concerns over quantum computing vulnerabilities. Unlike older SegWit (bc1q) addresses that only reveal a hash until the first spend, P2TR outputs store public keys directly on the blockchain, making them theoretically susceptible to Shor's algorithm. Consequently, major wallets like Bitcoin Core, Sparrow, and Ledger continue to default to Native SegWit.
Despite these challenges, Taproot is being utilized in Lightning Network channels and atomic swaps via services like Boltz. BitGo launched a MuSig2-based multisig in 2023, though broad software support for MuSig2 remains sparse, with only two wallets implementing it as of mid-2026. Ledger added support for the protocol in April 2025.
