To me or not to me? Buy or not buy? Here’s the dilemma. However, 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 ways to get BTC. But they are not the only ones.
This allows us to make a choice that we will try to answer in this content. Which of the two is cheaper?
Is it better to mine or buy bitcoin?
We choose the easiest option to buy Bitcoin. With this option you only need the internet, a crypto exchange of your choice and of course money.
This option has no return other than that which can be achieved through Bitcoin’s inherent volatility.
If you buy $ 1 in BTC, it is at best $ 1 in Bitcoin. But it won’t always be that way.
In the Cryptoverse, there are different prices for BTC, depending on the geographic 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. In contrast to the international price of Bitcoin, which is currently around $ 6,800.
And that happens in many countries in our region. The price differs from the international price, either due to restrictions on access to foreign currencies to obtain Bitcoin, or due to political problems that increase national demand for BTC, as in the case of Hong Kong.
Therefore, this question can have several “dependencies” that can affect the final answer. When converting $ 1 fiat money to $ 1 bitcoin, there are no transaction costs. However, if $ 1 is converted to $ 0.25 in Fiat, you have high transaction costs and therefore a negative return.
If your case is like the latter, you may want to consider breaking down BTC to permanently reduce these costs. Or, if your case is like the first, you may want that $ 1 invested in BTC is not 1: 1, but that your investment is generating returns that go beyond Bitcoin’s volatilities.
Mining or buying bitcoin? To answer this question, you need to see the other side of the cryptocurrency.
Bitcoin mining is an important process in the ecosystem. Mining not only checks transactions in the blockchain, but also creates new BTCs.
But in this world, $ 1 in fiat currency is not short of $ 1 in BTC. To start in this world, you need a hefty initial investment and high maintenance costs. Not only do you know a bit of complicated technical elements, you also ensure that your ASICs work efficiently and increase their maximum performance.
This world lives and breathes competition. The PoW validation method involves a backlog of recent transactions in blocks and an attempt to solve an encrypted puzzle. The first participant to solve the puzzle can insert the next block into the blockchain and claim its rewards.
Another thing to keep in mind is that this reward will gradually decrease over time. Exactly, we’re only a few days away from BTC’s halving that will only halve these rewards.
Other concepts that need to be considered are mining difficulty, hash rate, price of fees, maintenance costs, and equipment replacement.
This is critical as the equipment needs to be turned on 24 hours a day.
Bitcoin mining is expensive for two main reasons. Since you can no longer use your normal PC for mining, you first need special ASICs for Bitcoin mining.
The problem with this is that these devices are expensive. For example, the Antminer S9 with a hash performance 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 consumes a significant amount of energy in addition to special hardware. Consumption is sometimes so high that it scares off the cost of ASIC devices.
Current estimates assume that Bitcoin mining consumes almost 75 terawatt hours per year. First, it is enough energy to power at least 11 million households.
In general, bitcoin mining can be very lucrative. If you want to start now, consider the upcoming halving, which will cut miners’ rewards in half from currently 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 electricity costs in your country are not that high, the regulations will not affect you. You have the financial and technical capacity to do this. Without a doubt, your option is to mine BTC.
On the other hand, if you don’t have any of it, or just want to hodl or trade with your BTC, your option may be to buy the Bitcoin.
The most important thing is that we are all part of the ecosystem and in one way or another involve more people in this world. Well, a global crisis like never before is upon us and cryptocurrencies can save many lives. Better buy Bitcoin.