There are two routes you can take when investing in Bitcoin- you can either mine or trade, and each has its own set of pros and cons.
Let’s define what mining and trading is and the potential advantage and drawbacks.
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What is Bitcoin Mining?
Cryptocurrency mining is a digital term for harvesting cryptocurrency such as Bitcoin. In order to collect or be rewarded you must solve a complex mathematical problem. This is usually done using a computer with a considerable processor and graphics card.
In exchange for solving these equations you get rewarded a tiny bit of the cryptocurrency.
What is Bitcoin Trading?
Bitcoin trading is a lot like Forex or the stock market. Bitcoin and other cryptocurrencies are assigned values, and people in an exchange can buy or sell the crypto coins they want.
The investor usually starts by exchanging fiat currency into Bitcoin or other cryptocurrency, then sells it when the time and value is right. This is done on repeat and as part of the plan in order to make money.
Pros of Bitcoin Mining
Direct Sourcing of Cryptocurrency
You get a certain amount of freedom once you put together a machine to mine cryptocurrency. All you need to do is connect to your preferred network and cryptocurrency, then let the computer do the work. You get your crypto straight from the source instead of having to do so at a cryptocurrency exchange.
Cons of Bitcoin Mining
Competition
Since Bitcoin grew in popularity there have been mining farms dedicated to harvesting as much cryptocurrency as possible. The competition has risen and operate on a bigger scale than individuals.
Pros of Bitcoin Trading
Profitable
Both Bitcoin mining and trading are profitable. However, trading has the edge because you can complete as many actions as you want and make more money in the time you mine crypto.
To really maximize your gains you can start trading with the help of an analytics platform. These engines can tell you when Bitcoin or other cryptocurrencies will rise or when they will fall. Once you get the hang of trading you can put out more trades and volume and make money online.
Trade Anytime, Anywhere
What’s great about cryptocurrency trading is that the market is open 24/7. You can work it around your schedule, and all you need is a smartphone that’s connected to the internet.
You can complete trades as long as the value of the crypto is favorable in your behalf. It’s convenient and lets you compete with others on a global scale. You can eventually branch out and try other cryptocurrencies such as Ethereum or Litecoin, or invest in up-and-coming tokens you think has potential. The possibilities are virtually limitless.
Cons of Bitcoin Trading
Capital Needed
In any investment you will need to put forth capital, and Bitcoin trading is no different.
The good news is that you don’t have to put a substantial amount- only put in the amount you’re comfortable with, and the first thing you should do is pay attention to the trends and know when to cash in.