Should You Mine Cryptocurrency or Trade it?

Crypto mining entails the solving of a complicated code for which you need a dedicated computer system. Initially, mining was the easiest way of earning crypto, but as more people got interested the codes got more complex. It is essential that you purchase mining equipment at the right time and at a good price. Mining equipment can be easily sold, making the time spent in mining the main risk.

Earning crypto via mining requires you to possess the skills required to assemble the GPU mining farm. GPU mining farm isn’t usually linked to any particular cryptocurrency, thereby allowing you to switch across a variety of them. Due to increasing complexity, crypto mining is done with the help of application-specific integrated circuit or ASIC mining chips. Earlier, the GPU and PC were enough for the mining of crypto.

Cryptocurrency

The minimum investment in GPU mining is less than that required for ASIC mining. Before mining, you must analyse the new chips that have been released in the market. This includes looking into their features and other nuances. You must also have access to cheap electricity as that ensures a quicker return on the investments you make. This is evident from the countries with very low electricity prices being most attractive crypto mining destinations.

Pros and Cons of Mining

Pros

  • Very low risks
  • Can withdraw profits everyday
  • Have full control on your investment

Cons

  • Must have sound knowledge of computer hardware
  • Must know how to configure and maintain the components of PC
  • Must monitor the equipment constantly
  • Must be updated with the current cryptocurrency market
  • Low profits although its steady

Crypto earning from mining

The profits obtained from mining in comparison to trading profits are usually small and range somewhere between 60 to 100 percent every year. At the same, one doesn’t have to face too many risks. To safeguard yourself against fluctuating rates of exchange, you can always exchange cryptocurrency for fiat whenever you want to. Simultaneously, you’re prone to lose if you sell the crypto cheap, which can also increase the risks.

Once you have received your initial return from the investment you make, all you need to worry about is the cost of electricity. A miner will understand the market analysis and the most appropriate price for selling the crypto only with experience. When you are highly experienced in crypto mining, trading get a lot easier than you think.

Defining crypto trading

Crypto trading entails the sale and purchase of cryptocurrency. The traders involved in this exercise conduct trading on exchange as well as earn incomes from fluctuations in the rates. Cryptocurrency is usually priced very low and the value increases once it is sold. Before you begin the trading, you need to choose a reliable crypto for exchange. Choose one that has a user-friendly interface with top-tier security and quality support. Additionally, you should also keep for yourself a liquid trading pair.

One of the advantages of trading in comparison to mining is that you can work with more than one currency simultaneously. Trading isn’t a risk-free venture and therefore one must know how to manage money properly for future success. The greatest risk with trading is that if the cryptocurrency is cheap, it can lose its value. You can expect the value to grow over time. If you take a look at the price chart of Ethereum you’ll see that the prices have changed between 2018 and 2020.

Crypto trading needs to be preceded with analysis and understanding of the cryptocurrencies that are available to them. This is a time-consuming process and is rather complicated as you need to acquire some technical skills. It’s usually the margin trading crypto that possess the highest risks. If you’re positioned opposite to the market, the chances of losing money increases to a great extent. It is essential that you choose a secure and convenient exchange since trading fees and tools vary across different exchanges.

Pros and Cons of Trading

Pros:

  • High return
  • Only requires a smartphone or laptop
  • Depositing and withdrawing the exchange quickly

Cons:

  • Must have emotional control as well as skills of managing money
  • Possibility of loss of the entire investment
  • Must possess a trading strategy that is profitable
  • Calculating the potential profit is difficult

Earning from crypto trading

It’s not possible to provide an unequivocal answer to the above question and it ropes in multiple factors. On a good day, you can earn a really high profit. In fact, the trader can make 100 percent of the trading balance. However, making wrong decisions will probably cost you as you will lose money

If you can analyse the market properly and are looking for improvement in trading skills, your profits will be around 500 to 1000 percent per year. You have to keep in mind the price with which you buy crypto as well possess appropriate management skills when it comes to a financial emergency.

Which one is better?

There is no exact answer to this. When it comes to mining, there’s a high competition. Similarly, you’re a real trader only if you can experience real success. The risks are higher in trading compared to mining. At the same time, mining is more complicated than trading.

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