There are basically three ways to acquire Bitcoin:
- you can receive it as a form of payment
- you can buy it
- you can mine one for yourself
The first two options require little to no explanation considering the digital age we live in, where most transactions are done online. However, the third process involves a bit more complex than the other two. Nevertheless, the three are still valid ways of acquiring Bitcoins, even in 2022. But the question on everyone’s mind, especially when Bitcoin is experiencing some deep lows in its market value, is: “which is better – buy Bitcoin or mine it?”
Well, it’s a fair question to ask in 2022, and to do justice to the answer, we have to lay bare our options, defining both risks and advantages and evaluating their relative risk-to-reward ratio.
Bitcoin as a form of payment
Bitcoin has gradually grown since its inception in 2009 to become one of the generally accepted means of payment today. For Bitcoin to be used as a form of payment, both parties will be required to create a free blockchain account. Each user account is assigned a unique blockchain address that can be used to send and receive Bitcoins.
Bitcoin transactions involve the use of the internet and can be done via mobile phones, tabs, or desktop devices. Bitcoin can be sent or received from anywhere in the world as long as there is a valid blockchain address.
Bitcoin via purchase
Bitcoin can be bought from crypto exchange platforms, such as IXFI. Qualities of a good Bitcoin exchange include easy-to-use, cost-effective, secure, and a variety of payment sources. The steps involved in buying Bitcoin are pretty straightforward:
- Pick a preferred exchange provider
- Set up an account
- Fund your account
- Place your order.
Check out our step-by-step guide on how to buy crypto on IXFI.
Pros
- No cost of production is involved – you only pay for your worth value of Bitcoin.
- Bitcoin purchase is instant – no waiting for hours since you are buying Bitcoin already in circulation.
- The transaction fee is negligible (compared to the utilities that go into mining)
Cons
- There are fluctuations in the value of Bitcoin.
Mining Bitcoin
Bitcoin mining is the process of producing new Bitcoins into circulation. No form of payment is required to mine Bitcoin as long as the tools required to mine are in place. Mining is also the process by which the blockchain confirms new transactions, which makes it a pivotal part of the maintenance and development of the blockchain ledger.
Mining is achieved with the use of sophisticated hardware capable of solving very complex computational mathematical problems known as cryptography. The first computer to decipher the solution to the math problem would be rewarded the next block of Bitcoins, and the cycle would continue again.
Pros
- Even though the profit margin has been reduced significantly, the reward of mining is still significant.
- A computer, stable internet, and suitable hardware are all needed to start mining Bitcoin.
Cons
- Mining requires an extremely large power consumption producing heat as a side effect, making it an expensive option for Bitcoin enthusiasts.
- Mining requires the use of heavy-duty computers (mining rigs) with sophisticated hardware such as a Graphics Processing Unit (GPU) or Application-Specific Integrated Circuit (ASIC) miner, which costs about $3,000 to $10,000.
- It could take up to two years for an ASIC miner to make a profit.
Conclusion
The option available depends on the resources at your disposal. While mining rewards are significantly large, it does require an expensive cost of production to set up – electricity, stable internet connection, hardware, and software. On the other hand, buying Bitcoin requires almost no cost aside from transaction fees. As a rule of thumb, ensure to weigh the option in your favor and choose which works best with your resources.
For a better trading experience, create an account on IXFI where you can buy, sell, convert and swap over 450 cryptocurrencies, which includes Bitcoin.
Disclaimer: The content of this article is not investment advice and does not constitute an offer or solicitation to offer or recommendation of any investment product. It is for general purposes only and does not take into account your individual needs, investment objectives, and specific financial and fiscal circumstances.
Although the material contained in this article was prepared based on information from public and private sources that IXFI believes to be reliable, no representation, warranty, or undertaking, stated or implied, is given as to the accuracy of the information contained herein, and IXFI expressly disclaims any liability for the accuracy and completeness of the information contained in this article.
Investment involves risk: any ideas or strategies discussed herein should, therefore, not be undertaken by any individual without prior consultation with a financial professional for the purpose of assessing whether the ideas or strategies that are discussed are suitable to you based on your own personal financial and fiscal objectives, needs, and risk tolerance. IXFI expressly disclaims any liability or loss incurred by any person who acts on the information, ideas, or strategies discussed herein.
