Mining vs trading - What is more lucrative?
As you already know, trading can be very lucrative. You've probably already gained some experience regarding the stock market, but what about trading with cryptocurrencies? Could it be more profitable than trading stocks? And what about mining?
Mining cryptocurrencies yourself
In the early days, you could mine Bitcoins with your own PC or Notebook, gathering hundreds or even thousands in a single day. However, today more and more people want to take part in the Bitcoin gold rush, as its price has risen tremendously.
Many people have built big mining farms with thousands of graphics cards and coolers. You might wonder, whether you could start such a mining farm too. But nowadays, it's nearly impossible for an average person to engage in Bitcoin mining and to make a profit. When thinking about starting your own, you should bear this in mind: It requires a significant sum of money to buy all the necessary equipment, and you need to select a location with low electricity costs.
The risks of mining bitcoin yourself
Why is this like that? During the mining process, your mining equipment could potentially be damaged, as the gear is running continuously at maximum performance. Therefore, if you want to mine for yourself, you should consider buying at least four of these expensive machines, each costing as much as a new high-end gaming computer. Moreover, nobody can predict the future and how mining will progress. But as the majority of people who have invested in cryptocurrencies trust the cryptocurrency market and don't believe in a ‘bubble,' you can be quite sure that it will get a lot more difficult to mine in the near future.
The risks of mining altcoins yourself
So, what about mining altcoins? This is even riskier.
If you fall for a pump-and-dump coin with no real value, you need to be aware of the right market timing and when to sell. You need to know the company and the team behind the coin, to evaluate the fair price of the altcoin so that you can sell it when the price is exaggerated.
Cryptocurrency cloud mining
With this way of mining you only have to pay for a small percentage of a mining company to get a linear reward. This means that you won’t have to acquire the whole equipment, search for a location with low electricity cost or worry about failing equipment. Reputable mining companies will have high-quality coolers and continuously invest in top gear. However, as it is commonly known: more safety means less profit. In addition to that, you have to watch out for scams in the cloud mining space. It’s just like investing in less-known altcoins; you have to do your own research, check reputable sites like Tradimo and learn more about the mining companies advertising there.
Although most of the traders already have experience regarding the stock or Forex market, you need to bear in mind that cryptocurrencies are new. Therefore, you should consider changing your trading strategies.
But there are also other reasons that make trading with cryptocurrencies very risky. Some exchanges offer leverages to open long or short positions. Although it might make sense to go long on a cryptocurrency like bitcoin because you believe in the future of the technology, it could turn out to be the wrong decision during particular timeframes, as other traders and speculators will influence the price; especially when trading small or new cryptocurrencies.
As you see mining is getting less profitable as more and more people join the mining effort. So the final share of mining for each individual is much smaller than it used to be in the past.Trading cryptocurrencies, on the other hand, is becoming more and more similar to Forex and stocks trading, so traditional trading rules are applied up to a certain extent.
Opening a trading account
The details behind opening an account and trading will be covered in the next lessons. If meanwhile, you want to open an account with a broker feel free to do so. you can get yourself familiar with the terms and conditions, the interface and the overall services of the broker/s you choose. Remember you can start trading and practicing with a demo account.
At Tradimo we have partnered with the three most reputable brokers when it comes to cryptocurrencies. When you open an account from this page and deposit you will get offers exclusively for Tradimo learners.
Go ahead and explore!