According to a new report, Tesla made more money purchasing BTC in one day than it did selling cars in the past quarter as we read further in the latest Bitcoin news today.
The car manufacturer profited from the latest $1.5 billion BTC purchase in one day than it actually did by selling cars in the past quarter in 2020. With the huge position purchasing, BTC’s price increased 23 percent and Tesla made about $365 million dollars in one day. After Tesla announced it will take a $1.5 billion position in BTC, the cryptocurrency market went crazy and the world’s biggest cryptocurrency increased by $10,000 in a few hours and dragged the rest of the market with it.
While the entire industry was ecstatic about the huge market gains, it was Tesla that turned the most profit on the investment. The company saw the value of the investment increase by more than 23% in one day and given the fact that the position was worth $1.5 billion, the profit came down to $356 million. While this could not seem like a very significant number, it’s more than the company made selling its cars for the entire fourth quarter in 2020.
According to CNN, the company reported that its Q4 2020 net income adjusted at $270 million so the number was short of the $780 million net income that was estimated by Wall Street that erased a few percent of the TSLA valuation. The low net income surprised analysts with the company posting quarterly revenue of $10.7 billion marking a 46 percent increase from the past year. The adjusted income was up by 6700 percent from the profits the company posted in 2019 when it marked the first year that Tesla turned a profit.
As reported previously, Tesla’s investment has just put Bitcoin’s market cap en route to $1TN while many found the prediction made by Plan B in his bullish paper “Modeling Bitcoin Value with Scarcity” back in 2019 for the same level, crazy. Following the latest developments, this prediction seems to be closer than ever. Plan B noted that certain precious metals like gold have maintained their monetary role because of their costliness and the limited supply rate and he applied the same argument to BTC which is now more valuable as a programmed algorithm that reduces the supply by half every four years to mint 21 million units.
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Source: urchasing-btc-than-by-selling-cars/
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By Dmitriy Gurkovskiy, Chief Analyst at RoboForex
Disclaimer
Any predictions contained herein are based on the author’s particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.
Source: inlink (LINK) has launched a major upgrade for its oracle network, dubbed Off-Chain Reporting, or OCR. The upgrade was announced on Wednesday, though the implementation has been live for some time already.
OCR changes how data across multiple sources is joined together by the oracle network. Previously, the process of aggregating different readings of the same desired input, for example a token’s price, was done on-chain. Chainlink nodes would submit their individual readings of the data, which would be verified by a smart contract on Ethereum and other blockchains. This approach, while guaranteeing reliability of the data, was inefficient in terms of gas costs, as each node would need to spend resources to publish the data.
The new architecture replaces on-chain aggregation with an off-chain consensus round. The aggregated data is then passed on to the blockchain, where a smart contract verifies that a quorum of nodes agreed on this version of the data.
Sergey Nazarov, founder of Chainlink, told Cointelegraph that the team has been working on the protocol since 2017. “We’ve started to put the best minds behind [it] over the last year and a half and have done substantial multiple audits on it,” he added.
The most immediate effect of the upgrade is reduced gas costs and load on the Ethereum network. According to the team, the upgrade will result in a tenfold increase in the amount of real-world data that could be available on the blockchain. As Nazarov explained, this increase is “partially related” to the gas limitations of the Ethereum blockchain:
“I think the nuance here is that we want to do this in a scalable way, basically, and we want to do it in a scalable way that works for Ethereum and various other chains. What this means is that, in times of congestion, the system should be able to continue to deliver these amounts of data because when you architect a system like this, you don’t architect for the best case.”
Chainlink nodes thus could have chosen to publish more data with the previous system, though the gas costs would have made that significantly difficult. “Our system needs to be able to function even in extreme situations, which so far it has been, better than all other oracles,” continued Nazarov. “So that’s the standard we need to meet. And if we suddenly increase 10x the amount of data on the current system — yeah, it could work in some good conditions and it would be costly, and it would actually raise everybody’s costs, which is not something we believe in.”
But beyond the immediate effects, Nazarov believes that this upgrade will have more important effects in the future. “Really what you’re seeing here now is the Chainlink network growing into something that is going to do more and more off-chain computation.”
While that does not mean Chainlink will transition to building rollups and layer two solutions, Nazarov said there are three distinct services that the Chainlink network will soon provide. This includes verifiable randomness, a feature that has already been launched and that allows DApps to have a trusted source of random numbers, which could be particularly useful for gambling platforms and prediction markets. The other services, enabled by OCR, include keeper functions and fair sequencing, both solutions to very practical problems affecting DeFi.
Keepers are a type of maintainers necessary in smart contract environments. For example, some contracts require conducting periodic actions, which are normally triggered by the team or someone in the community — formalizing this behavior is what projects like Keep3r or Fetch.ai are trying to do.
Fair sequencing is a proposed service that aims to fix front-running and miner extractable value in DeFi. The issue arises when a blockchain operator can freely rearrange transactions to theirs or someone else’s benefit. For example, when they see a multi-million swap about to be confirmed on Uniswap, they can quickly place their transaction to benefit from a better price.
The OCR system enables more freedom in how computations are performed on the Chainlink network, enabling new kinds of services centered around computing data instead of publishing it. Nazarov said that these ideas come from very practical needs that are unaddressed in the current market. “We generally do not want to build the pieces of the stack that we do not have to build,” he said. “We want to be the maximally positive-enabling force for smart contracts, closing all the gaps in the stack that aren’t closed.”
Source: reducing-gas-costs-tenfold
Daniel Ives, an analyst at Wedbush Securities, has revealed he believes in the short term Tesla’s share price is directly going to be linked to the price of bitcoin, after the electric car marker’s $1.5 billion bitcoin bet. According to CNBC, Ives wrote that as Tesla is “diving into the deep end of the pool […]
Daniel Ives, an analyst at Wedbush Securities, has revealed he believes in the short term Tesla’s share price is directly going to be linked to the price of bitcoin, after the electric car marker’s $1.5 billion bitcoin bet.
According to CNBC, Ives wrote that as Tesla is “diving into the deep end of the pool on bitcoin,” its CEO Elon Musk runs “the risk that this side show can overshadow the fundamental EV (electric vehicle) vision in the near term for investors.” Ives added:
Musk is now tied to the bitcoin story in the eyes of the Street and although Tesla made a billion paper profit in its first month owning the digital gold, it comes with added risk, as seen this week.
Despite his concerns, the analyst believes buying bitcoin was a “smart move at the right time” for Tesla. As reported, the analyst has estimated Tesla made a $1 billion profit on its $1.5 billion bitcoin bet thanks to the rising value of the flagship cryptocurrency.
Ives added that on the downside, the firm is “playing with firecrackers and risks and volatility are added” to its story. Both Tesla and BTC saw their prices crash earlier this week, with Tesla’s stock price dropping from over $780 late last week to a $652 low before recovering.
Similarly, bitcoin dropped from over $58,000 to a $45,600 low before it started recovering. The cryptocurrency is now trading at $50,800 and is seemingly still climbing. BTC dropped after U.S. Treasury Secretary Janet Yellen warned against cryptocurrency, saying bitcoin is an “extremely inefficient way of conducting transactions.”
Despite Tesla’s focus on bitcoin and its price being tied to the cryptocurrency, Wedbush is still bullish on Tesla, believing it will “hit a one trillion market cap over the coming months” through the growth of its electric vehicle business, and not through its bitcoin investment.
While bitcoin is “overshadowing the broader Tesla growth story for 2021,” Ives noted he believes the trend will soon pass and investors will focus on Tesla’s electric vehicle business.
Featured image via Pixabay.