Bitcoin Taproot powers transactions to ATH
Bitcoin’s Taproot upgrade is a pivotal moment for the cryptocurrency, as it brings a series of improvements designed to improve network efficiency and privacy. In fact, this upgrade is considered one of the most important updates in Bitcoin’s history, and it is expected to have a major impact for years to come.
As per Glass node, Taproot transactions accounted for more than 37% of the Bitcoin network’s spent outputs, indicating a growing demand for the upgrade. This was also reflected in the adoption and utilization targets, with a record 60% of all transactions on May 1 leveraging Taproot.
So, what does the Bitcoin Taproot upgrade mean for investors?
4/ Now what is the reason for this sudden demand for #Bitcoin transactions?
A look at the transaction types used in #Bitcoin network shows an increase in taproot transactions – up to 37.5% of used output was P2TR output types on April 30th!
Diagram: pic.twitter.com/l9smei2pS
— Rafael Schultze-Kraft (@n3ocortex) 4 May 2023
Taproot Upgrade: Outstanding 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, which simplifies the verification process for transactions on the Bitcoin network.
Since the upgrade, the number of daily BTC transactions on the chain has skyrocketed past half a million. On May 1, the daily number of transactions reached a record high of 682,000.
On the last increase of #Bitcoin transactions, and what drives this 🧵
The number of #BTC Transactions on the chain have recently seen an astonishing increase, surpassing 0.5 million daily transactions, with an all-time high of 682,000 on May 1st.
Diagram: pic.twitter.com/ECNIgm176b
— Rafael Schultze-Kraft (@n3ocortex) 4 May 2023
According to a chirping, Rafael Schultze, co-founder and CTO of Glassnode, this increase represents a more than two-fold increase compared to the 2022 baseline, which remained stable at approximately 250,000 transactions per day throughout the previous year.
In short, the Taproot upgrade drives an unprecedented level of network efficiency and transaction volume for the alpha coin, creating new opportunities and challenges for investors and traders alike.
Impact on Bitcoin Price
Since the Taproot upgrade is a technical change, most users will likely not notice its implementation. However, investors should pay close attention to this development as it could have significant long-term effects on the leading cryptocurrency.
An important advantage of the upgrade is lower transaction fees. This is due to the reduction in data size for complex transactions, which creates more space to process additional entries on the blockchain.
Moreover, the Taproot upgrade directly affects the cost-effectiveness and functionality of the Lighting Network. 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 upgrade establishes a technical framework to accelerate peer-to-peer financial services in the new DeFi ecosystem on the Bitcoin network. This expansion of the crypto tool creates new opportunities for entrepreneurs who want to invest in the cryptocurrency’s long-term potential.
Source: CoinMarketCap
As for the impact of the Taproot upgrade on the BTC price, it remains to be seen. At the time of writing is the price of Bitcoin is $29,596.31, showing a slight increase of 0.9% in the last 24 hours and the last seven days.
On the other hand, 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 if institutional and mainstream participants stick with existing platforms or switch to Bitcoin.
– Featured image from Paxful
