Bitcoin Taproot Drives Transactions To ATH
Bitcoin’s Taproot upgrade is a pivotal moment for the cryptocurrency, as it brings with it a host of improvements designed to increase the network’s efficiency and privacy. In fact, this update is considered to be one of the most significant updates in Bitcoin history and is expected to have a huge impact for years to come.
According to glassnode, Taproot transactions accounted for more than 37% of Bitcoin network spent outflows, indicating a growing demand for the upgrade. This was also reflected in adoption and utilization metrics, with a record 60% of all transactions on May 1st leveraging Taproot.
So what does the Bitcoin Taproot upgrade mean for investors?
4/ Now, what is causing this sudden demand for #Bitcoin transactions?
A look at the transaction types spent on #Bitcoin the network shows an increase in Taproot transactions – up to 37.5% of spent exits were P2TR exit type on April 30th!
Chart: https://t.co/9mPhKJZ9gz pic.twitter.com/l9smoei2pS
— Rafael Schultze-Kraft (@n3ocortex) May 4, 2023
Upgrade Taproot: Unprecedented network efficiency, transaction volume
The Taproot upgrade aims to achieve a faster, more efficient and private network. This update introduces the ability to group multiple signatures and transactions together, simplifying the process of verifying transactions on the Bitcoin network.
Since the update, the number of daily BTC transactions on-chain has skyrocketed, surpassing half a million. On May 1, the daily transaction count reached an all-time high of 682,000.
About the recent increase in #Bitcoin transactions and what’s behind it 🧵
The number of #BTC On-chain transactions have recently seen a surprising increase, surpassing 0.5 million transactions daily, with a record 682,000 on May 1st.
Chart: https://t.co/DtrQinpCel pic.twitter.com/ECNIgm176b
— Rafael Schultze-Kraft (@n3ocortex) May 4, 2023
according to a tweet, Rafael Schultze, co-founder and CTO of Glassnode, this increase represents a more than two-fold increase compared to the 2022 baseline, which remained flat at approximately 250,000 transactions per day during the prior year.
In short, the Taproot upgrade is driving an unprecedented level of network efficiency and transaction volume for the alpha coin, creating new opportunities and challenges for investors and traders alike.
Bitcoin price impact
Since the Taproot update is a technical change, most users are unlikely to notice its implementation. However, investors should pay close attention to this development as it could have significant long-term effects on the leading cryptocurrency.
One of the main benefits of the upgrade is lower transaction fees. This is due to decreasing data size for complex transactions, which creates more space to process additional entries on the blockchain.
In addition, the Taproot upgrade directly affects the cost-effectiveness and functionality of Lighting Network. The Lighting Network becomes more versatile for developers, allowing them to build on it cheaper and safer for users.
BTCUSD slowly moving past the $29K level on the weekend chart at TradingView.com
The implementation of the Taproot update establishes a technical framework for accelerating peer-to-peer financial services in the emerging DeFi ecosystem on the Bitcoin network. This expansion of the cryptocurrency utility creates new opportunities for entrepreneurs who want to invest in the long-term potential of cryptocurrency.
Source: CoinMarketCap
Regarding the impact of the Taproot upgrade on the BTC price, it remains to be seen. At the time of writing, the price of bitcoin is $29,596.31, showing a slight increase of 0.9% over the past 24 hours and over the past seven days.
However, analysts suggest that the Taproot upgrade has significantly increased the coin’s value as trust in the network continues to grow. It will be interesting to see whether institutional and traditional players stick with existing platforms or switch to Bitcoin.
-Featured image from Paxful