Zcash is a cryptocurrency that prioritizes anonymity and uses mining to create new coins. Every time miners add a new block to the blockchain, which takes place roughly every 2.5 minutes, they create a new ZEC.
A Quick Overview
- How does mining work?
- Hardware for ZCash mining
- GPU Hardware
- Software for mining Zcash
- How much money can you make mining Zcash?
- How to calculate mining profits
How does Zcash Mining Work?
Unlike other cryptocurrencies, Zcash had a slow-start mechanism when it began. In order to reduce the possibility that the protocol might have flaws or security issues, this meant that the initial currency distribution into the system was substantially smaller. The first 20,000 blocks mined during the first month were subject to this mechanism.
The coin is resistant to mining with application-specific integrated circuit chips (ASICs) since it uses the “proof of work” protocol and “Equihash” algorithm. This is of great value for new miners because it is practically impossible to compete with cryptocurrencies mined with ASICs if you mine using CPU or GPU gear.
Hardware for Zcash Mining
Knowing your alternatives is crucial because the type of mining hardware utilized during the mining process affects possible mining profitability. ZCash uses the Equihash algorithm, which means that mining it requires a lot of RAM and is not possible with ASICs. As a result, you can mine ZEC with CPUs and GPUs.
Zcash mining has the benefit of allowing you to use your existing CPU, which is not possible with other cryptocurrencies like Bitcoin. This is one of the key distinctions between Zcash and cryptocurrencies that rely on ASIC miners. Because of how strong this equipment is, CPU mining would be extremely unprofitable, but this option is not usually available for Zcash mining. Units can become very hot during mining, so if you have a CPU specifically for mining, make sure you have enough cooling.
GPU mining has the advantage of being far faster and more effective than CPU mining. But you’ll need to put in more effort. You must consider the GPU equipment’s hashing power when purchasing it because it directly affects how effective it will be.
The older GPUs can become hot very rapidly, and if the cooling isn’t functioning properly, it might soon lead to the ruin of your investment. Miners can also purchase a used setup.
When mining Zcash, you don’t need to invest in a costly “rig” that would drain your bank account. Use your present CPU and think about upgrading to a GPU later if you want to start right now.
If you have prior mining experience and want to maximize your Zcash mining revenues more quickly, you might think about making a direct GPU purchase. Although the GPU configuration has a better potential for increased earnings, it is not required if you only want to see how the mining process operates.
Software for Zcash mining
You must download the right software before you can begin mining. The following software options are available for Zcash mining:
- CPU: Minergate or Nicehash
- Claymore’s Miner AMD GPU
- nVidia GPUs: CUDA for EWBF Miner Zcash
After downloading the appropriate miner compatible with your hardware, extract it to the folder of your choice. Once the miner has been extracted, the configuration file must be edited to set the Zcash address and mining pool.
How much money can you make from ZCash mining?
Every miner wants to start making money as soon as possible. As a result, many people are interested in the potential earnings of Zcash. The total supply of coins for Zcash is equal to that of Bitcoin; there will never be more than 21 million ZEC units produced.
The Zcash company’s stakeholders, which include the founders, investors, advisors, and workers, have reserved 10% of that incentive. This is called the “Founders Reward”.
The miners will receive 80% of the freshly minted ZEC within the first four years after its inception, with the remaining 20% going to the founders. 50 ZEC are created every ten minutes. The pace at which miners manufacture ZEC halves every four years, just like Bitcoin.
The block reward is currently set at 12.5 ZEC. However, after four years (or 840,000 blocks) that payment reduces by half. The award will increase each year, starting with 6.25 in 2020 and decreasing to 3.12 in 2024, and so on (until the currency reaches its cap). As a result, mining will get more difficult over time. Like with the majority of brand-new cryptocurrencies, individuals that began mining first have an advantage.
How to Calculate Mining Profits
The earnings from mining Zcash, or any other cryptocurrency for that matter, depend on a number of important aspects. The following are the main elements you need to consider:
- Present market value
- The kind of hardware
- Overall available hash power
- Electricity price
- Pool usage fees
It’s advisable to use a profit calculator to calculate an estimate of how much you may earn given your individual requirements.
To determine your profit ratio per day and per month, most calculators enable you to enter the hashing power, power usage, and cost per kW/h. You can use this kind of calculator to estimate whether the investment will be greater than the possible profit before you acquire your equipment.
You can also determine whether purchasing a GPU will enable you to considerably boost your profit potential if you currently own a CPU.
The most recent profit potential is not exceptionally high, according to calculators. This is due to the market’s ongoing price declines in 2018, which have made it challenging for small miners to turn a profit. But these findings are simply speculations.
For those interested in mining Zcash, here’s a guide that can come in handy. Meanwhile, there is still a lot to learn if you want to mine Zcash profitably because the market and competition are tough.