The surge in popularity of Bitcoin in the last five odd years is quite unparalleled.
From seeing a high of nearly $20000 USD in December 2017, to the lows of nearly $1000 USD in late 2018, Bitcoin has seen a lot of volatility since its inception.
Bitcoin is a digital currency that aims to be independent of governments and financial institutions.
The proponents of Bitcoin state its many advantages ranging from lower transaction costs to a more democratic financial market, free of government currency manipulations.
In this article, we will look at which channel is more lucrative when it comes to Bitcoins- Trading or Mining?
Bitcoin Mining: Is it still possible?
Like paper notes, which can be printed in mints, Bitcoins are mined.
They are generated after complex algorithms are solved by computational powers. This means that you would need computer systems, hardware as well as software to generate Bitcoins.
When Bitcoin first emerged into the scene back in 2009-10, mining was a relatively easy process.
The Truth About Forex Trading, Bitcoin Mining, And Cryptocurrency
It involved using your humble Home Desktop and you were good to go. Over time, this process has become much more complicated and technologically advanced.
Bitcoin Miners use state-of-the-art processing systems to mine a fraction of the Bitcoin.
This means that it is not possible for a vast majority of the population to undertake Bitcoin mining. There are Bitcoin Mining Farms, which use million-dollar equipment to mine Bitcoins.
As more and more people start to do so, the processes and competition further increases.
It is important to note that when it comes to Bitcoin, the mining rewards decrease to nearly half, every four years. This means it is a less rewarding experience, as compared to when it first started.
Even when people are able to set up their systems, which can go up to nearly $8000 USD, they do not filter in the power costs.
According to some estimated, in order to mine one Bitcoin in 2019, you would need to spend at least $3000 USD on power tariff alone. On current valuations of Bitcoin, it seems not worth it.
Bitcoin Trading: The Simpler, Cheaper Alternative?
If you are someone who has experience of trading stocks, you will not find much of a difference when it comes to Bitcoin Trading Platforms.
These platforms work in exactly the same way as traditional stock and share trading ones.
Complicated algorithms and automated processes help you take buying or selling decisions based on the existing market factors. For the vast majority, who want to invest, buy, sell or trade in Bitcoins, this is emerging as a more suitable channel.
However, the key is to understand how the trading takes place, before you start doing it formally.
The best platforms do not take a lot of money, in terms of commission fees. While some of them are even free.
You can start investing and trading with a nominal amount of as low as $250 USD.
The system guides you on what you need to do, how you can make a trade and so on. If you wish to know more about Bitcoin Trading Platforms, you can learn more here.
Which is better: Trading or Mining?
According to commentators who have been following the growth and development of Bitcoins for the last decade, trading has emerged as a more viable alternative to mining.
People tend to forget that unlike traditional currency, Bitcoin has a limit- 21 Million Bitcoins.
Once this is reached, it would be all about who is the better trader when it comes to Bitcoins.
Do let us know what you think is a better alternative to earning from Bitcoins in the comments section below.