The NFT transaction sends the biggest shock to the Bitcoin network in recent history

by James · February 9, 2023

The largest Bitcoin transaction turns out to be an NFT.
Bitcoin bulls cool off, but golden cross could heat things up again.

While everyone and their cat was focused on whether Bitcoin would start February with renewed upside or retracement, something interesting happened. The Bitcoin network recorded the largest block in the past four months.

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Initial findings revealed that the large transaction in the block did not incur fees, which is an unusual result. According to reports, the transaction was carried out by an NFT project called Taproot Wizard.

Even more interesting is that the data sent via the Bitcoin blockchain was an NFT sent in its entirety as a JPEG image.

Transaction data on the Bitcoin blockchain has historically been limited to very small packets of data. Sending a full JPEG NFT means that the amount of data sent will be significantly higher.

Is Bitcoin Network Exploring NFT Tool?

The Bitcoin network has historically been limited in terms of transaction capacity and speed due to block size limits. The transaction is linked to Taproot Wizard, an NFT project experimenting with innovation on the Bitcoin blockchain.

Bitcoin core has opposed these experiments for the same reason that Bitcoin’s block size remains unchanged. Adding support for NFT functionality may require implementing larger block sizes.

This can open up new challenges for the network, for example lower security. Experts also believe that larger blocks could compromise the network’s anti-censorship capabilities.

Did the transaction dupe Bitcoin investors?

Bitcoin has struggled to maintain its upside since the beginning of this month. This is around the same time that the block size limit increased. There was some speculation that the incident may have been an attempted network attack.

Such speculation is the type that triggers FUD back into the market, which may have triggered some concern among investors.

Bitcoin is down nearly 5% from its current high of $24,258 so far this year, to a press time price of $23,129. Despite this, there is one interesting observation that could support the next big price move.

Source: TradingView

How much is 1,10,100 BTC worth today?

Bitcoin’s 50-day moving average is currently in the process of crossing the 200-day moving average from below. If it does, it will form a golden cross which is traditionally considered a bullish sign.

But all of this is subject to prevailing market conditions that may favor the bulls or the bears.