DEBATE: Buy A Mining Rig or Buy the Coin?

Many people in the crypto market have been internally debating whether they should put up the money to buy a mining rig or to use that money to buy the coin here and now. It really comes down to what will have the higher return on investment (ROI). There are benefits, drawbacks, and a whole lot of uncertainty in this debate.

I'll make this short and sweet: There is no definitive answer to this debate. Either choice could be the right choice depending on a whole lot of variables. These variables include what coin you are looking into, future prices, future mining difficulty, when you buy, and when you sell. Many of these things really can't be controlled for or predicted reliably.

So what are the benefits to both?

To start lets look at the benefits of mining:

• Usually profitable even when prices are down
• Hardware holds some of its value and has other uses
• Regular payouts

The negatives:

• Large upfront fixed costs to buy the hardware
• Produces a lot of heat
• Takes a long time to fully return your investment (Possible that you might not get it all back)
• Requires knowledge to set up and requires upkeep

The benefits of buying the cryptocurrency:

• Liquid investment
• ROI relies on price and not time
• Could appreciate quickly

Negatives:

• Very volatile market
• Could depreciate quickly
• Largely dependent on the market

I have no definite answer as both have their positives and negatives. The choice is ultimately up to the investor and their preferences.

Here is an article on this topic: https://www.reinisfischer.com/mine-or-buy-ethereumzcashmonero-2018

What if Bitcoin Breaks its ATH?

With Bitcoin still far from its all time high price near $20,000 this post will be all about speculation and hypothetical. Currently the price of Bitcoin is sitting near $8,800 (04/26/2018). The last time it was at its all time high was in December of 2017. Four months later we have seen a rapid fall in prices across the board in the cryptocurrency space. So what would happen if Bitcoin broke through its all time high?

1) First of all, alt coins would skyrocket.

The prices of alt coins have fallen harder than Bitcoin has. For example, the price of Ripple fell from an all time high of around $3 all the way down to the 47 cent range. I'm not saying that Ripple will return to $3 if Bitcoin breaks $20,000 but I'm sure Ripple will increase in value from its price today of 80 cents. It's hard to say where Ripple would end up, but a strong Bitcoin could bring along the rest of the market to test their all time highs as well.

Ripple is just an example. The large majority of alt coins would greatly increase in price as Bitcoin does as well. Currently, the health of the crypto market is largely based on the strength of Bitcoin.

2) Mining would become much more profitable.

Going off of the second point, an increase in prices would result in greater profitability for miners. Mining profitability is largely tied to both the difficulty and the prices of the coin. Monero, for example, recently saw a huge drop in mining difficulty as a hardfork in the blockchain's protocol eliminated ASICs. This saw a spike in profitability in mining the coin which was gone rather quickly as other miners switched to mine Monero. The other way to increase profitability is if the coin is simply worth more. With the recent dips in prices mining profitability has taken a big hit. If Bitcoin were to push past it's ATH, the rest of the market will be more profitable to mine as their prices get pushed up as well.

Here is an absolutely great article on Bitcoin's past ATH's and how long it took to break: https://steemit.com/bitcoin/@penguinpablo/how-long-will-it-take-for-bitcoin-to-reach-usd20-000-again

Inspiration When Prices are Down

When the prices of cryptocurrencies were sky high, everyone was talking about them. Everyone was making large returns in the extremely bullish market that crypto was a few months ago and everyone had to brag about it. Well times have changed and they have changed fast.

With Bitcoin sitting under $7,000 and Ethereum under $400 it's hard to not be discouraged by the relatively low prices. Bitcoin was once near $20,000 per coin. Ethereum used to be $1,400 per coin. These are drastic dips in price no doubt. So why should you stick with crypto? Was it a bubble and did if finally pop?

Lets take a look at history. Bitcoin has been called a bubble for almost its whole existence. When Bitcoin first reached $1,000 it was called a bubble and quickly fell to the $200 range for a while. This was early 2014. That's a larger percentage dip then the current dip from all time highs. I'm sure many people took advantage of the lower prices then and enjoyed a huge upside when the market turned around.

Many people trade crypto just for short term gains. I think that's the wrong mindset. If you truly believe in the technology of the asset you would invest long term. The current prices are like heaven for any one that believes in crypto and is investing long term. This may very well be a great time to accumulate more and more cryptocurrencies of your choice at the relatively low price. Nothing is for certain, but if the market turns around like it has done so countless times, it can be very profitable. Timing the market is extremely difficult and prices may further go down. However, in the long term I believe the market is still profitable.

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Here is an article on Ethereum's falling prices: https://slate.com/technology/2018/03/ethereum-prices-drop-explanation.html