Most people today choose to invest in cryptocurrency. But not everyone seems to understand that mining cryptocurrency is also an investment. You purchase equipment, invest your time, and spend on paying the bills for electricity. But what is better – to start mining or exchanging.
It is certainly easier to, for example, exchange btc to xlm, or convert fiat money to a crypto coin of your choosing, but some experts claim it could be more beneficial to mine currencies. Is it true? Check out the article to learn a bit more about each process and which one is better in your case.
Requirements to Start Mining Crypto Money
If you are thinking about investing your time and effort into mining, you should understand what it takes to begin. You should learn how to start mining, create an account within a blockchain where you are planning to get coins, and overall, gain a lot of skills. But that’s not everything you need to consider.
Mining requires having equipment. There are three types of equipment to use for mining:
CPU and GPU are a processing unit and a graphics card respectively. By using any of these components, you can mine the currency with a PC or computer. GPUs are in general better since they have more hash power, therefore, gain more profit in shorter terms, but they consume a ton of electricity. The advantages of both CPU and GPU are pretty obvious – you can use these components later on if you decide to stop mining.
ASICs are better for mining since they have a lot more hash power than the previous two examples. Moreover, ASICs consume less power, therefore your investment pays off sooner. But if you decide to stop mining, you won’t be able to use the ASIC in any other way.
Requirements to Start Exchanging Digital Tokens
To start exchanging, you need to create an account and be verified. That’s mostly it. You need an e-wallet to store your digital coins, but creating an e-wallet is a rather short process. Then you can start buying cryptocurrency.
Note, there are two types of crypto exchanges:
The first one has a third party as a mediator between you and the buyer. The good thing about this type of website is that you can use it to exchange 24/7 and buy crypto coins by using fiat money. The usage of such a website requires paying a fee for transactions.
A decentralized platform is one where you on your own find a seller of the coin you wish to buy. It requires no fees but barely can be used 24/7 since there may be no sellers of the coin that you need.
If you are planning on gaining passive income, then exchanging is a way to go. It allows you to react according to the situation on the market. For example, if one of the currencies might be gaining at price, it’s a nice idea to quickly invest in it and gain profit. Mining won’t give you such freedom.
So, if you simply wish to invest in cryptocurrency to gain profit, it’s easier to convert fiat money than to start mining. Moreover, when you are mining, you are mining one type of token, and you never know if it won’t drop in price in the future.