How To

How to Calculate Zcash Mining Profitability?

Zcash is a digital cryptocurrency which uses zk-snarks or zero knowledge proofs to ensure that transactions between two users remain completely anonymous. Unlike the Bitcoin blockchain which has records of all parties in a transaction and the total amount involved in the transaction, Zcash blockchain will only reveal when a transaction occurs, but not the amount or parties involved in it. The Zcash was really started in a bid to resolve the security loopholes which existed in the Bitcoin network. The Zcash developers created a protocol which would allow users to concert the Bitcoin into Zero coins and these would remain totally anonymous.

To mine the Zcash you need to get specialized mining equipments, mining pools and mining software. You can use an online mining profitability calculator to calculate the amount of profit you can make from specific Zcash miners. Such mining calculators will take into consideration your hardware costs, electricity expenses and fees. You need to enter the hash power of the miner which you plan on using for mining Zcash. The more the number of miners the higher will be the mining difficulty. Block reward refers to how many ZEC you will be able to earn every time a block is solved successfully. This data will also keep getting updated with time. The miners usually group together in mining pools to improve their chances of earning more rewards. These mining pools will also take fees from every miner. This is calculated by the online mining profitability calculator when you are trying to find out how profitable Zcash mining will be for you. Finally, the calculator will also take into account your hardware costs, or more specifically, cost of the miner you will be using for mining.

Profits are calculated based on the difficulty to mine the ZEC. This difficulty will keep changing and experience shows that the difficulty level typically goes up with time. So, what you earn from mining is not the profit you will have to evaluate it against on your hardware costs and the power consumption costs.

Zcash zk-snarks protocols have been largely untested and this digital currency has not been yet adopted extensively. But, it is believed that Zcash prices will typically depend upon demand and supply; the latter is expected to grow but the demand is yet uncertain.

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