Mining or trading, what to choose for a beginner, where there is more profit and, of course, what is more profitable to do. Today we will analyze each of the areas of activity, choose the best one and answer all questions.
Cryptocurrency and in particular bitcoin are becoming more and more popular, which leads to the arrival of a huge number of newcomers to the market. Cryptocurrency is especially popular among the young part of the population, many use it as an additional income or place of storage. Cryptocurrency is convenient to pay for goods, services, with a minimum commission to transfer money.
I propose to start with mining, let’s figure out how and what works.
Mining is the support of cryptographic network functionality by creating blocks in Blockchain using computing technology. Miners use the power of computer hardware to solve the cryptographic equation that closes the block.
Basically, cryptocurrency is mined on video cards, but there are cases when GPUs act as a tool for solving cryptographic equations.
The miner who finds the digital signature is paid a certain amount of digital coins. Cryptocurrency mining guarantees the integrity of the blockchain ecosystem, miners control the movement of assets, protecting the network from double-spending (double spending of assets).
The main ways of cryptocurrency mining
Mining can be done in the cloud. You rent a certain amount of computing power (hashrate) in a remote data center over the Internet and receive a reward in cryptocurrency. Some services rent out not only the hashrate, but also physical units of equipment (ASICs) with subsequent repurchase or transfer to ownership after the rental period expires.
The main advantage of this type of mining of virtual coins is the absence of noise in your apartment. You do not need to buy and configure equipment, monitor its operation around the clock. Pay once and receive coins in your crypto wallet for the duration of the contract.
The disadvantage of cloud mining is the high risk of losing the money invested due to the large number of scam projects in this digital asset mining sector. Even if you have signed a cloud mining contract with a real data center, you may not make a profit if there are serious market drawdowns. Almost all the crypto you earn will go to pay for electricity and overheads, carefully read the terms of the contract and do not invest money if their loss leads you to complete bankruptcy.
Mining on video cards (GPUs)
Mining on video cards is a fairly popular and cost-effective way to earn cryptocurrency. ASIC miners, of course, are more productive, but video cards have a three-year warranty period, they are quite easy to reconfigure to a different algorithm.
Older models such as the RX 570 and GTX 1070 are still relevant for mining and are relatively inexpensive. And, most importantly, one ASIC makes noise louder than a farm of 6 video cards. The latest versions of popular ether mining utilities allow you to work on AMD GPUs without flashing the BIOS. Set up the executable and mine on the stock BIOS with the maximum hashrate without losing the right to warranty service. In some cases, miners prefer to reflash cards to increase the hashrate.
Trading is the work with assets on the stock exchange. Buying and selling at the most favorable price. Just do not confuse trading with binary options, they are two different things that work differently.
Main types of trading
It’s not difficult to understand what a day trader is, because the principle of work is hidden in the name. The speculator opens positions with the limitation in the trading session. Deals of such users are never carried over to the next day. In the case of cryptocurrency exchanges, the duration of an open position reaches 24 hours due to the lack of time limits. This approach is used in the securities market, where the value of the asset outside the trading session is unpredictable.
Scalping is also opening and closing trades during the day, but scalpers work with one-minute and five-minute timeframes. This is stressful trading, and it is also difficult: the minute chart of 80-90 percent conveys market noise, it is difficult to analyze.
However, scalpers earn more than all other traders. The flow of those wishing to master the “hunt for scalps” in the market is growing year by year.
We have analyzed the main points in two areas of cryptocurrency activity. Of course, which is better for you to choose. But you should understand that if you decide to engage in mining, your starting budget should be higher than the budget of a novice trader. Of course, you can build a mining farm for 5 k – but it will bring you practically nothing.
If you have a budget of up to $1,000, I advise you to take a closer look at trading. If higher – you can fully engage in mining.