Bitcoin Mining vs Bitcoin Buying

John Sostak
November 12, 2023
min read

Which one should I do?

I’m going to try and be diplomatic and pragmatic, so I won’t sperg out for 1k words about how exchanges suck. But I’d be lying if I didn’t admit I’m thinking it as I type. Mining Bitcoin has consumed me for going on 10 years, and through ups and downs I’ve only become more bullish on mining as I must admit, exchanges become more and more important to Bitcoin buyers, HODLers and be still my maxi heart, Miners.

Miners move Bitcoin they have earned upstream to exchanges. This how they convert Bitcoin into dollars to pay for power, operations and taxes. The exchanges are where the price of Bitcoin is established. Without a transparent marketplace, Bitcoin would not be a liquid asset. The exchanges for better or worse are how Bitcoin is valued.

Exchanges carry risk.  If you buy Bitcoin on an exchange, it is best practice to remove it from the exchange after you have paid for it. The reality is custody is critical and if you are a business or a high net worth HODLer, you cannot trust an exchange with an asset like Bitcoin. Socalled “hacks” always happen, and if the hack or the government seizes your Bitcoin, you’d wish it was on a Trezor or at Unchained Capital.

While miners may be selling some or all of their Bitcoin to exchanges, through Atomic they can sell their hashing directly to buyers who can use it to capture Bitcoin and have it sent directly to their cold wallet. With Atomic, miners can also bypass some exchange risks and costs, and buyers can as well and even capture some tax benefits.

Nobody wants an exchange to fail, but the fact is they do, I’m not naming names (rhymes with F-T-Wrecks). If you aren’t a degen day trader, there is no reason not to keep a minimum amount of fiat on the exchange to buy Bitcoin, and all your Bitcoin in YOUR custody.

When you are mining, you avoid the exchange, and you also avoid the messy transaction history that is forever embedded on the blockchain. If insert current bogeyman has touched Bitcoin before you, it may make it harder to transfer or use when you need to. Mining Bitcoin fixes this because the Bitcoin is issued from Core without previous history.

Everyone in Bitcoin relies on exchanges, but Miners have better Bitcoin, and less risk. If you are committed to Bitcoin you can DCA through Atomic and capture your own, better Bitcoin, and minimize your exposure to exchange related risks.

Atomic will be live and open to the American Bitcoin mining industry in Q1 2024. 

Whether you are a Bitcoin miner or buyer / investor in Bitcoin, create an account and Atomic will send you an invite to Mine on Atomic.

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