Crypto Mining VS Crypto Trading

The question for many individuals looking to get into cryptocurrency is:

Should I mine cryptocurrency or should I flip them like stocks (buy low, sell high and profit on the margins)?

The better question to ask is:

Are you looking to profit in the long-run (years later) or looking for quick profits (less than one year)?

Below, we look at the pro’s and the con’s of mining and trading cryptocurrency

Mining Cryptocurrency

Pros

  • Ability to adjust profit margins by changing the finding cost-cutting measures of running the operation
  • Long-term investment, so short-term booms and bust do not affect you
  • Mining for use in the future, where transaction fees are most likely going to decrease due to the adoption of crypto and advancement of technology
  • Consistent profits

Con’s

  • Huge investment (depending on the size of operation)
  • Huge time involvement (finding rigs, location to host, electricity source etc…)
  • Equation complexity (as more coins are mined, the more complex the equation, meaning the use of more resources [electricity and hashrate] to mine one coin)
  • Mining Pool fee’s – To mine cryptocurrency effectively, you would want to join a mining pool.
Cryptocurrency mining vs trading

Trading Cryptocurrency

Pros

  • No investment in equipment
  • Trading crypto is in some cases more secure then mining – crypto is held in wallets for a shorter period, less likely to be stolen/hacked
  • Easy to manage, sell high and buy low – also a con, as you need to be able to predict the market trend

Con’s

  • Profit margins are based on market trends; no way to increase margins
  • Transaction cost for trading and purchasing of the coin
  • Profit only accounts for the current value of the dollar, long-term wise; the dollar gained today will be a lot lower compared to a crypto coin valuation.
  • Higher risk
How MiningSky helps in cryptocurrency mining

MiningSky is able to resolve a majority of the con’s in cryptomining by providing:

Why Mining Is the Better Choice

The focus will be in the following two topics:

  • Stability / Value of the Dollar
  • Pricing / Cost (specifically on the cost of miners)

Stability / Value of the Dollar

With the recent instability of the government in North America (seen below), having a stable value on your asset would be your best investment. The value of the dollar/exchange rate is controlled by the banks and regulations set by the government, while cryptocurrency currently is not. Using U.S.A as an example, the government is able to manipulate the exchange rate through the supply of money or the interest rate. Cryptocurrency, on the other hand, is hard to manipulate due to the fact that supply is based on how many coins are mined, which the government cannot control.

Pricing / Cost (Miners)

The current market is in high demand for GPU’s for use in both crypto mining and gaming. Nvidia and AMD, two of the biggest GPU manufacturers, were not expecting such a high demand for their GPU’s which resulted in the supply, not meeting demand. With the supplies being low, scalpers are buying all the GPU’s to resell to miners at a profit margin. Nvidia and AMD, being focused on creating GPU’s for gaming, are rumored to be releasing graphics cards purely for mining. The cards are rumored to be at a lower price than an equally powerful graphics card but would not have a video connector port. This would allow the prices of GPU to decrease with the increase in supply and also decrease in competitions between miners and gamers.

MiningSky Insight

We were able to sit down with Saba Golshan, Vice President of Partnerships at MiningSky, and Robert Mullaney, Vice President of New Business at MiningSky, to get their opinion on the following:

  • Why should someone choose to mine cryptocurrency and not buy it?
  • Why should someone dive into the market head-on with a mining farm (500+ miners) instead of starting small and growing?

Saba Golshan – VP of Partnerships at MiningSky

Saba Golshan the VP of Partnerships at MiningSky

Contact Email: Saba@miningsky.com

Why should someone choose to mine cryptocurrency and not buy it?

Two of the greatest wonders of the world are residual income and compounded interest. In mining, you get these two great wealth principles at once. When you are using an expert in hosting it eliminates numerous risks that are associated with mining and mining becomes the clear long-term investment.

Why should someone dive into the market head-on with a mining farm (500+ miners) instead of starting small and growing?

The mining community, especially in North America, is still so young. Opportunity cost and scalability is still an option here in North America. As you increase your farm you will continue to benefit from the exponential effect of compounded interest and residual income.

Why should someone choose to mine cryptocurrency and not buy it?

In terms of finances, mining cryptocurrency can be a more consistent income than trading it. No matter the markets, one will always be making an income as long as their electricity costs are less than the amount mined. I also believe learning as one gets into mining, they will be forced to learn about computers and their inner workings which will become a valuable skill to have in years to come.

Why should someone dive into the market head-on with a mining farm (500+ miners) instead of starting small and growing?

I believe right now mining, especially in the United States and Canada is in an infancy stage. The next 5 years the people that started now and grow fast will be way ahead of the game in terms of mining and knowing the most efficient way to do it. The only way to approach this business to make a substantial impact is to go big. Starting small isn’t a bad option either to learn, but for someone looking to make an impact, starting small is not a route I would go down.

Robert Mullaney – VP of New Business at MiningSky

Robert Mullaney – Vice President of New Business at MiningSky

Contact email: Robert@miningsky.com

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