NFTs on the Bitcoin Blockchain bring Bitcoin network activity surges to two-year highs

Recent activity on the Bitcoin network has been on the rise, reaching its highest level since 5/2021 according to data from CryptoQuant.

Source: CryptoQuant

The daily transaction count on the network has risen to 345K, the highest since 4/2021, driving the activity. Examining the transactions in more detail, we can see that P2TR transactions have been driving growth.

Taproot commands, deployed on Bitcoin in November 2021, are being used in these transactions. As Inscriptions are added to the blockchain, the average daily Bitcoin block size has reached a new all-time high.

According to CryptoQuant Network Activity Index, larger blocks have a positive impact on network activity. Clearly, due to the new inscriptions, some of the recent Bitcoin blocks in the past few days have exceeded the 4 MB block size limit. These blocks are the largest in Bitcoin history. Transaction fees have also been increasing slightly but still remain much lower than the current level.

NFTs on the Bitcoin blockchain could bring more financial use cases and drive more demand for block space. This will increase mining fees and drive sustainable growth in the long run. On the other hand, recording non-replaceable features into satoshis could have a negative impact on privacy and replaceability.

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