There are multiple ways to earn money using bitcoins. Some prefer to mine bitcoins to earn rewards whilst many people buy bitcoins to make money by investing and trading. The decision of whether to buy or mine bitcoins can be a little tricky. If you follow the wrong path, you might end up making huge losses.
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Advantages of buying Bitcoins
Buying bitcoins is easier than ever
The primary advantage of buying Bitcoins over mining is that it is easier to buy bitcoins. You can simply look for online crypto exchanges where you can convert your FIAT currency in exchange for bitcoins. Even people with basic knowledge of cryptocurrency can buy Bitcoins easily.
You just have to open your crypto wallet to store your bitcoins which can be done in a couple of minutes. You can easily access these crypto exchange websites from your smartphone or laptop. Ensure that the crypto exchange platform is well-recognized to be safe from online fraud and scams.
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No extra cost on buying bitcoins
Buying bitcoins gives you the benefit of converting your FIAT money into bitcoins with no extra cost or additional fees on processing payments. Money transfer from one country to another from banks can be quite expensive, but you can convert your money into bitcoins and send them anywhere without incurring any additional fees.
Once you buy Bitcoins, you can use them for several purposes: investing, trading, shopping, etc. If you make the right use of the bitcoins and if your luck favors, then you can get high returns making a lot of money.
Disadvantages of buying Bitcoins
Buying bitcoin can be riskier
Cryptocurrencies like bitcoins are highly volatile, and the risk involved in buying bitcoins can be high if you are not aware of the crypto market. The change in the price of bitcoins fluctuates at a high pace, and you might incur a loss if the price of Bitcoins falls significantly.
Even experienced investors sometimes fail to speculate the value of bitcoins and end up incurring losses. The price of bitcoins is considered at market price. So if you have purchased bitcoins at a higher price and the next day the price of bitcoins falls, then you have to wait to spend them until the price doesn’t rise again.
Advantages of mining Bitcoins
Mining bitcoins can be more profitable
Bitcoin mining can often prove to be profitable if you have advanced mining rigs with high computational power. Mining bitcoins allows you to earn 6.25 BTC as a reward if you can solve a block of bitcoin, which takes nearly 10 minutes.
Even if you don’t have many advanced mining rigs, you can choose to join mining pools where the chances of getting a reward are higher as all miners combine their computing power to get the rewards. Also, the rewards are shared amongst every miner based on the computing power they provided.
Disadvantages of mining Bitcoins
Bitcoin mining is very expensive
Mining bitcoins is very expensive. Bitcoin being the most valuable cryptocurrency has several miners in the server competing with each other to get bitcoins as rewards. You will require AISC devices to mine bitcoins.
These AISC devices are very expensive and you might have to install multiple AISC devices to mine bitcoins solo. Even if you have enough money to buy all the required hardware, you even have to look for monthly electricity bills that might even reach thousands of dollars because bitcoin mining requires a constant supply of energy to work efficiently.
Mining bitcoins can be overwhelming
Bitcoin mining can be overwhelming and completed, especially if you don’t have much knowledge about how bitcoin mining works. The difficulty involved with mining bitcoins has increased significantly over the last few years.
To start with bitcoin mining, first, you have to assemble all the hardware required to complete the mining rig ready for mining. You will also have to install a cooling system so that the devices don’t get too heated.
Once you are done with all this, you must have an abundant source of energy to facilitate electricity and at last, comes downloading software for which you must know machine language and coding.
Buying Vs. Mining bitcoins – which is more suitable for you?
To some people, it might seem that buying bitcoins is easier whereas, many will think mining bitcoins is safer and more profitable than buying bitcoins, and the choice is totally up to you. No doubt buying bitcoins is easy, but it’s not just about buying bitcoins. You should also know how and where to invest them to earn profits instead of incurring losses.
If you have enough experience in trading and investing, then buying bitcoins is a better option rather than putting so much effort into mining bitcoins. Similarly, if you want to earn bitcoins without involving any risk as they are highly volatile, mining bitcoins will be a better option for you.
If you have enough money to spend on setting up a crypto mining rig with high computational power, then you can easily mine solo and earn bitcoins easily. Also, you can join mining pools to increase your chances of receiving bitcoins as rewards if you don’t have a highly advanced computing device.
Different people will have different views favoring buying bitcoins over mining them and vice-versa. Before you make any decisions, you must consider all the factors that influence buying and mining bitcoins and then make any decision. These are a few pros and cons of buying and mining bitcoins that will help you to make a wiser decision.