Bitcoin's network is experiencing a significant spike in activity following the Taproot upgrade, which improved the privacy, scalability, and security of the network and paved the way for the creation of decentralized apps on the Bitcoin blockchain. Glassnode data suggests that more than 75% of Bitcoin on-chain transactions used Taproot on May 7, a record high compared to only 1.536% at the beginning of the year, leading to a surge in network traffic. This has pushed the average fee rate to the highest in nearly two years, while the number of addresses sending BTC to exchanges hit a 2-year low, potentially indicating that investors are willing to hold the asset in anticipation of a new rally. However, the network congestion has also ignited concerns over a potential Denial of Service attack.
(By Chayanika Deka)
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