To mine or not to mine? To buy or not to buy? Here is the dilemma. But, a better question might be: Is it better to mine or buy Bitcoin?
Both mining and acquiring the world’s first cryptocurrency are one of the best-known methods of obtaining BTC. But are not the only ones.
This makes us raise a choice that we will try to answer in this content. Which of the two is less expensive?
Is it better to mine or buy Bitcoin?
We are going for the easiest option, the one to buy Bitcoin. In this option you only need the Internet, a crypto exchange of your choice and of course money.
Buy Bitcoin
This option has no return, except that which can be earned by Bitcoin’s inherent volatility.
If you buy $ 1 in BTC, it will only be $ 1 in Bitcoin at best. But it won’t always be this way.
In the cryptoverse there are different prices of BTC, depending on the geographical area and the crypto exchange to which you have access.
For example, in Venezuela 🇻🇪 the price of each BTC in Binance P2P is approximately $ 7,500, while in Argentina it is almost $ 11,000. Unlike Bitcoin’s international price, which is currently around $ 6,800.
And this happens, in many countries in our region. The price is differing from the international price, either due to restrictions on access to foreign currencies to get hold of Bitcoin, or political problems that increase the national demand for BTC, such as the case of Hong Kong 🇭🇰.
Therefore, this question may have several “depends” that may affect the final answer. If $ 1 in fiat money transforms into $ 1 in Bitcoin, then there is no transaction cost. But, if $ 1 in fiat is transformed into $ 0.25, you will have a high transaction cost and therefore a negative return.
If your case is like the latter, then perhaps you should consider mining BTC to cut these costs permanently. Or, if your case is like the first one, then perhaps you want $ 1 invested in BTC not to be 1: 1, but your investment to generate returns beyond Bitcoin’s volatilities.
Mining or buying Bitcoin? To answer this question, you need to see the other side of the crypto currency.
Mine BTC
Mining Bitcoin is a vital process of the ecosystem. Mining involves both the verification of transactions on the Blockchain and the creation of new BTCs.
But, in this world $ 1 in fiat currency doesn’t equate to $ 1 in BTC any time soon. To start in this world you need a juicy initial investment and high maintenance costs. As well as knowing a bit complicated technical elements, to keep your ASICs working efficiently and squeezing their maximum performance.
This world lives and breathes competition. The PoW validation method involves a backlog of recent transactions in blocks and trying to solve an encrypted puzzle. The first participant to solve the puzzle can place the next block on the Blockchain and claim its rewards.
Another thing to keep in mind is that this reward will gradually decrease over time. Precisely, we are just days away from BTC’s Halving, which will cut those rewards just in half.
Other concepts that must be taken into account are the difficulty of mining, the hash rate, in addition to the price of fees, maintenance costs and equipment replacements.
This is of vital importance, since the equipment will have to be on 24 hours a day.
Mining hardware
Bitcoin mining is expensive due to two main reasons. First of all, since you can no longer use your normal PC to mine, you need specific ASICs for Bitcoin mining.
The problem here is that these devices are expensive. For example, the Antminer S9 with hash power of up to 14.0 TH / s costs at least $ 3,000 new. It is not recommended to buy used equipment.
Second, if you can afford the hardware, you have to worry about energy costs. Bitcoin mining, in addition to specialized hardware, consumes a significant amount of energy. Consumption is sometimes so large that it is by far a deterrent to the cost of ASIC equipment.
Current estimates suggest that Bitcoin mining consumes almost 75 terawatt hours per year. First, this is enough energy to power at least 11 million homes.
In general, Bitcoin mining can be very lucrative. If you choose to start now, be sure to consider the upcoming Halving, where miners’ rewards will be cut in half, from current 12.5 BTC to 6.25 BTC.
Is it better to mine or buy Bitcoin?
The answer can only be given by you. If the cost of electricity in your country is not so expensive, the regulations will not work against you, you have the financial and technical capacity to do so. So without a doubt your option is to mine BTC.
On the other hand, if you do not have any of this, or if you simply want to hodl or trade with your BTC, then your option may be to buy the Bitcoin.
The important thing here is that we are all part of the ecosystem and that, by one means or the other, we incorporate more people into this world. Well, a global crisis like never before is just around the corner, and cryptocurrencies can save many lives. Better to mine buy Bitcoin.
