How much does it cost to buy bitcoin now

While the exchange does not offer discounts for trading with the Gemini dollar, traders can make as many withdrawals in a month as they wish using Gemini USD instead of fiat currencies. There is a limited amount of gold on earth. Why Bitcoin is Gaining Traction The world is becoming ever more reliant on the internet. Apart from the price of bitcoin itself, each cryptocurrency exchange adds a fee for trading, i. Table of Contents Expand. Key Takeaways Buying and selling cryptocurrencies has become increasingly popular since Bitcoin first debuted back in It is also present in Europe and Canada.

Lately, miners have flocked to Iceland, known for its relatively moderate climate and the abundance of hydropower. In fact, bitcoin mining energy consumption is yow to exceed private consumption, an energy expert told the BBC. And according to the Bitcoin Energy Consumption Indexglobal energy usage of all bitcoin mining already is equivalent to the power uptake of the country of the Czech Republic, with a population of In search of cost savings, cryptocurrency miners traverse the globe to take advantage of cheaper energy. Those virtual miners perform a crucial function within the blockchain, or the decentralized ledger technology that underpins most cryptocurrencies, by solving complex problems to validate transactions on the network, In exchange for this function, which powers miners are rewarded with bitcoins.

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By using our site, you acknowledge that you have read and understand our Cookie Policy , Privacy Policy , and our Terms of Service. Given that it is relatively cheap to mine bitcoin and there are even managed server solutions you can rent, is there any logical reason to buy bitcoins at a higher price, than they cost in production? Why are people mortgaging their houses in order to buy bitcoin at Mining: It’s a lot of trouble and expensive to set up a proper rig and the return on investment can take a long time when mining. It’s not as cheap or profitable to mine the coins as you make it seem. It takes into account total network hashing power, average block time etc. It would take you a year to make your money back on your investment, and since the nature of that playing field is that a piece of equipment’s yields reduce over time it will most likely take a lot more than one year to break even from the purchase of that miner.

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By using our site, you acknowledge that you have read and understand our Cookie PolicyPrivacy Policyand our Terms of Service. Given that it is relatively cheap to mine bitcoin and there are even managed server solutions you can rent, is there any logical mcuh to buy bitcoins at a higher price, than they cost in production?

Why are people mortgaging their houses in order to buy bitcoin at Mining: It’s a lot of trouble and expensive to set up a proper rig and the return on investment can bow a long time when mining.

It’s not as cheap or profitable to mine the coins as you make it. It takes into account total network hashing power, average block time. It would take you a year to make your money back on your investment, and since the nature of that playing field is that a piece of equipment’s yields reduce over time it will most likely take a lot more than one year to break even from the purchase of that miner. Most miners are pretty much the same or take even longer to pay back; feel free to play around with that calculator and input different mining rigs you find on the internet.

Bottom Line: the reason people don’t easily mine it for a tenth of the cost is because it’s neither easy nor much cheaper to mine it. You are talking about two mufh different investment options. One is investing cash into a type of commodity cosf has shown extremely high volatility; uby other one is investing low amount of cash, but significant amount of time to create «mine» additional units of the same commodity.

Sure the outcome of both are tied to the price of BTC. But ask yourself this: if you have a crystal ball that tells you, tomorrow BTC will double in price, will you borrow as much as you can to buy spot BTC, or buy a bunch of rigs to mine?

You also implied that the intrinsic mucy of a bitcoin is the same as the marginal cost of mining an additional unit. That is probably the theoretical equilibrium point where mining bitcoin is fruitless, but the value itself isn’t defined this way but rather, like abelenky said, by what you can do with it and what people think that they can do with it. In other words, the marginal cost should continue to rise up to bitcoun point where it converges to the value of a bitcoin, as approximated by its market price not a good proxy tho IMHO.

EDIT: This bitcoin mania looks a lot like the gold mania back in the 70s. And interestingly, OP’s question and my answers also apply. Why isn’t the gold price the same as the cost to mine an ounce nuch gold? Most people jow no interest in buying, setting up, and operating a mining rig. It may be beyond the technical ability of many people, and simply isn’t how they would choose to spend their time.

If someone is truly focused only on owning as much Bitcoin as possible, then it is true that mining is a cheaper route than buying. Hhow the end result would be that they own kt pile of ones-and-zeros, which Bitcoin critics are always quick to point out have no intrinsic value. As bitcoins become bicoin valuable, more people use more miners, invent more efficient ASICs.

As more hashing power comes online, the new coins being mined at a constant rate get spread out thinner. Eventually the cost of mining approaches the value of the coins mined. When that happens, people collectively stop adding more hashing power.

If and when bitcoins become less valuable, it will stop being worth paying for the electricity to run ho miners. Hashing power goes offline. Those that stay in get rewarded with larger shares of byu new coins. It’s possible for there to be temporary situations where the cost of mining a coin would be nontrivially less than its value; however, by the time you go buy an ASIC off byy and get it running, that inefficiency will have already evaporated.

Your second misunderstanding is a corollary to the first: Your estimate of the cost of mining one bitcoin is off by an order of magnitude. It’s astonishing how the cost of mining a coin has kept up with the value of coins, which have been doubling every month or so, but that just shows you how efficient this market is.

Assuming that there’s an infinite number of bitcoins and assuming that you can «mine a bitcoin» quickly, yes, you would be right. There’s one block mined every 10 minutes on average with a set payout cos block. If you decided you want to invest in mich and go ahead and mine a few bitcoins you would have mjch bitcoin in a year, depending on how much you want to invest.

You also have to take into account that none of the bitcoin miners want to break. They don’t spend thousands of dollars on mining rigs so mucg they can sell the bitcoins near the price it would take to mine.

The up-front cost is extremely high at this point. You could just spend a hundred bucks on a USB miner and have your bitcoin in a few decades Similarly you could be asking why the price for electricity doed so high when you could just build a nuclear power mucu that generates a kWh of electricity for fractions of a doe Home Questions Tags Users Unanswered.

Is there a logical reason to buy bitcoin for more than it go to mine it? Ask Question. Asked 2 years ago. Active 2 years ago. Viewed times.

Bjy the sake of this question let’s assume bitcoin was useful and had value beyond speculation. Why would you ever buy bitcoin above mining price? I have heard various estimates of what it costs to mine a bitcoin.

Shouldn’t the price of bitcoin be very closely tied to the price of producing bitcoin? Because people are irrational? Bitcoin is not mined by normal «computers». It requires specialized ASIC rigs that are extremely power-hungry and generate a lot of heat and noise.

You probably do not want one in your bedroom, and the electricity bill would eliminate most profits. Cloud-mining is a possibility, but individual mining makes very little sense. Its still called a computer, ro since there are so many cloud solutions the technical barrier and the «bedroom» problem aren’t really stopping anybody from mining or investing in mining rather than botcoin directly.

This might be on topic somewhere else, like at the bitcoin SE, but it’s not particularly personal finance related and is largely opinion. And OP asked for «logical reason», which is something that can be reasoned objectively. Alexandre Aubrey Alexandre Aubrey 1 1 silver badge 5 5 bronze badges. BenVoigt Why would anyone invest in cloud mining in this case? I hpw heard of people making money with it.

Note: do not try this at home, kids. You have to ask yourself, why is the cloud provider renting the server to you instead of just using it on their own behalf? Not that that means it’s a bad deal for you, but, think about what each of you is gaining from the transaction.

Maybe you just like gambling, not join any pool, and roll the dice on a six figure but highly unlikely payout. Whereas the cloud provider wants a steadier income. Am I the only one who sees a certain humour in a cloud service provider renting their equipment to mine bitcoin and charging in those very same bitcoins? The value of BTC is not owning it, it is what you can do with it. I kind of xost that, for cist transactions, sure. But the people who invest could just throw their money dose cloud mining, where they don’t need to know or do anything and get a lot better price per coin than You have it backwards: the price of producing bitcoin is actually tied to the price of bitcoin.

But the price has increased faster than mining difficutly in the last months wouldnt noq agree? Maybe, but so has the street price of an ASIC, plus the difficulty of finding one actually for sale. Then by the time you get your hands on one, so will a bunch of other people. And like someone said above — if you knew bitcoin was going to double in price in a month, would you buy an ASIC and wait weeks how much does it cost to buy bitcoin now it to arrive, or would you buy a coin?

A «few decades» with a USB miner is optimistic. Sign up or log in Sign up using Google. Sign up using Facebook. Sign up using Email and Password. Post as a guest Name. Email Required, but never shown. Featured on Meta. Update: an agreement with Monica Cellio. Related Hot Network Questions. Question feed. Bitcoin Stack Exchange works best with JavaScript enabled.

It’s CoinDesk’s Markets Daily. Coinbase bundle fees turn out to be cheaper because the user is only required to pay a single bitciin fee in the transaction as opposed to individual transactions in which they would have to conduct five separate transactions with individual fees for each transaction to purchase the same cryptocurrencies. There is a nominal fee to fund accounts using fiat currencies. A sound, global currency like Bitcoin will have the same impact on finance and the global economy. For example, cryptocurrency exchanges are governed by a patchwork of regulations in the United States — the second largest market for ut trading. So, really: It is no surprise that Bitcoin, a secure, global, and digital currency has claimed the interest of investors. Digital Currency Exchanger DCE Definition A how much does it cost to buy bitcoin now currency exchanger DCE is a person or business that exchanges legal tender for electronic currencies, and roes versa, for a commission. Find a Bitcoin Exchange How to Secure Bitcoins As with anything valuable, hackers, thieves, and scammers will all be after your bitcoins, so securing your bitcoins is necessary. Related Articles. Bitcoin Cash Bitcoin cash is a cryptocurrency created in Augustarising from a fork of Bitcoin. Part Of. Iterative Capital is working with Breez on a point-of-sale app for bitcoin lightning payments. However, exchanges will let you buy any amount, and you can buy less than one bitcoin. Bitcoin vs. Related Terms Bitcoin Exchange Definition A bitcoin exchange is a digital marketplace where traders can buy and sell bitcoins using different fiat currencies or altcoins.