Zcash is a relatively new decentralized and opens source cryptocurrency like bitcoin in many ways but with some planned improvement in features. Zcash mining has kept everyone talking about it right from its inception in the last quarter of 2016.
Although all the Zcash payments are published in the public blockchain, the value of the transaction, who the sender is, to whom they sent the payment etc. are kept private. Everything is done in an encrypted manner. This is one primary difference and superiority of Zcash mining over Bitcoin where the transactions are not completely private. If you know a Bitcoin address, you can easily follow their transactions and discover to whom payments were made, from whom they received payments and the amount in each transaction.
How It Differs From the Rest
In addition to ensuring 100% anonymity, Zcash also allows the users the choice of shielded transactions using the most modern techniques in cryptography. It uses zk-SNARK- a zero-knowledge proof model called Proof of Construction. The constructions ensure the security of ledger balances and validating transactions without disclosing any other information pertaining to the parties involved and the transaction value.
Zcash mining follows the Bitcoin in many ways and has a total supply of 21 million coins. It continues with reducing of 50% once every 4 years. While Bitcoin has a 10-minute block time, Zcash is four times faster at 2.5 minutes block time.
Bit of Controversy
The ZEC distribution is different again. In the first 4% of Zcash mined, the founders take away 20% which means the Zcash stakeholders take away 10% of the total coin supply. How much is given to whom is not defined but it is justified to meet the long-term goals of the company. The company will receive 100% of the rewards at the end of 4 years. 1% of the mining rewards will go as donations to the non-profit organizations.
High Scope for Growth
In the early days of inception, Zcash enjoyed a smooth ride northwards with its price touching over $5,000. However, as with many other cryptocurrencies, price too started wavering and dived to around $ 50. At the time of writing the Zcash price is around USD$203. Optimists predict that the coin has a great potential and will cross USD $60,000 within the next 6 to 7 years. These are all predictions and should not be a reason for anybody to invest. Cryptocurrency market is highly volatile, and anything can happen at any time.
Zcash uses the Equihash algorithm and is based on the Proof of Work method. Like Ethereum, it is ASIC resistant. This means Zcash mining can still be profitable using the CPU/GPU. One of the most frequently asked questions is how to pick the best hardware to mine Zcash. There are numerous hardware options for the miners to choose from.
While CPU based mining is still possible, it is not profitable if you are looking at mining to earn some money. You may not even recover the costs of electricity with CPUs as on date. Investing in graphics cards is a necessity if you want some decent returns for your efforts and power being used.
If you have the time and skills, you could build your own Zcash mining rig. The components are all available online at all the leading e-commerce stores or you could purchase directly from the manufacturer. The requirements include:
– Motherboard: A motherboard that comes with 6 GPU slots.
– Graphics Cards: A necessity must be the latest available in the market with the best hash rate.
– CPU: Whatever comes with the motherboard? Mining will be on GPUs so there is not much relevance to CPUs.
– RAM: A 4 GB RAM would be more than sufficient.
– Hard Drives: Using SSDs can ensure better speed and efficiency.
– Power Supply: High watt PSUs are required.
– PCI-E Risers: This could be useful to connect the motherboards and GPUs.
– Open Frame Case: The frame must be big enough to hold all the components.
This may be cheaper but as mentioned waiting for components, assembling, testing etc will require some serious effort and patience. You must have the skills to deploy and maintain the hardware.
Use the Cloud Mining
Zcash mining can be done in the Cloud environment. It will eliminate huge investments in procuring infrastructure and its maintenance. You must do a bit of homework finding the most reliable cloud mining provider. Unless you have an experienced and honest service provider, you cannot expect the yields that others cloud mining assures of. The contract usually is drawn for a year or two. You buy hash power from the provider and once the contract is signed and payment is done, the mining starts right away. Cloud mining is scalable and more reliable than your home-based mining.