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Privacy coins like Zcash (ZEC) are getting harder to acquire on centralized exchanges due to regulatory concerns. However, it is still a valuable crypto asset worth holding a using. Should you try mining Zcash instead of buying it? Can you make a profit from it? In this guide, we are going to answer these questions about Zcash mining and cover all bases!
Key Takeaways
- Zcash (ZEC) is a Proof-of-work cryptocurrency, which means it can be mined. Cryptocurrency mining is a process of running specialized mining software to add new blocks to the blockchain.
- Mining supports the decentralized network, so it is a popular activity in the Zcash community even on a not-for-profit basis. Nevertheless, for most miners, it is primarily a revenue source.
- ZEC is best mined with application-specific integrated circuits (ASIC) miners. To break even and make a profit, considerable computational power is a must, so unless you can provide it, consider joining a Zcash mining pool.
Introduction to Zcash Mining
In a few words, Zcash mining is the process of cryptographically securing the Zcash network through proof-of-work (PoW). It involves performing hash solving, which is best summarized as guessing the next block’s hash. Incidentally, new coins get added to the ZEC cryptocurrency supply to compensate miners for their contributions.
Zcash uses the Equihash algorithm, which used to have a degree of incompatibility with application-specific integrated circuits (ASICs). However, since at least 2018, this is no longer true, as ASIC manufacturers managed to produce the processors fit for the task.
Understanding Zcash Economics
Like Bitcoin, the total Zcash supply will not exceed 21 million coins. So far, since 2016, 77% of ZEC has entered circulation through the mining process.
A halving mechanism about every four years regulates the coin supply by slowing the production of new Zcash coins. The last ZCash halving occurred in May 2023 and reduced miner rewards to 1.56 per block. The next one is expected to happen around November 2025. The halving mechanism is supposed to make a cryptocurrency more scarce and increase the price, provided the demand stays the same or increases.
Why Mine Zcash?
You can think of mining and holding crypto as another method of receiving crypto but what to do next with it is up to you. Buying gear and mining cryptocurrency allows you to own an income-producing asset. Conversely, selling your gear and pocketing the crypto generated as profit is another way to make money.
It should also be mentioned that although most Zcash miners do it for profit, some community members choose to do it to support the network and project. Zcash is a modification of the Bitcoin protocol that includes privacy-protecting features, making it an important cryptocurrency to maintain.
Preparing for Zcash Mining
Setting Up a Zcash Wallet
First things first, you need a safe wallet to keep your Zcash profits before you begin mining. Available wallet types include software, hardware, and online wallets. Make sure the wallet you select is Zcash-compatible. You can also choose a wallet that supports shielded addresses for improved privacy.
If you want to be able to manage ZEC and other cryptocurrencies on a mobile device, we recommend Edge Wallet. ZEC addresses made in this app are shielded by default. For more significant holdings, a hardware wallet like Trezor is an option with boosted security.
Selecting Mining Hardware
As of 2024, the only viable Zcash miner option is the ASIC method. The times when GPUs and CPUs could both be used to mine Zcash or even when GPU mining was more effective than CPU mining is in the past.
Major manufacturers of Equihash algorithm ASICs are Bitmain and Innosilicon. The latest and most powerful device is Bitmain Antminer Z15 Pro worth about $2,500. The first viable ASIC for Equihash, the Antminer Z9 Mini model, on the other hand, can be bought for ten times cheaper at resellers but might not produce as good a result.
Zcash Mining Profitability
Calculating Mining Rewards
Hardware choices should be made with mining revenue and profits in mind. Luckily, many online calculators can help you with estimating the initial investment and profitability. Popular resources include WhatToMine and CoinWarz.
To calculate revenue and profit, fill in the data in one of the Zcash mining profitability calculators. It will factor in difficulty, hash rate, power consumption, and electricity cost, which can be difficult to do without a calculator.
Although it is challenging these days, Zcash mining can be profitable with the right gear and electricity just cheap enough. Make sure to do exact profitability calculations before investing in any equipment.
Setting Up Your Mining Environment
Zcash Miner Hosting
Full disclosure: working ASICs have a high noise level, to the extent that having one in your home might not work for you. Domestic power supplies can also be not enough to power such demanding devices.
If this becomes an issue, outsourcing ASIC hosting and maintenance to a colocation might be the right solution. Mining facilities will provide a place to run your mining hardware while taking care of the ongoing maintenance for a fee.
Setting Up
The first step once you get your hands on the hardware is to connect your ASIC to the electricity supply and the internet with a cable. Find the ASIC in your local network and run the manufacturer’s software to configure it. From there, you should be good to mine Zcash solo or proceed to join a mining pool.
Joining a Zcash Mining Pool
Benefits of Pool Mining
As mentioned before, mining Zcash individually is feasible if your mining equipment power is on par with the rest of the network participants. Other benefits of solo mining Zcash include being able to pocket block rewards in full and the lack of a membership fee.
In contrast, joining a mining pool provides more stable revenues, although pool fees eat into that. Different mining pools have varying policies on payouts. The most frequent types are Pay Per Share (PPS) and Pay Per Last N Shares (PPLNS). PPS pays for solved puzzles, which is stable but low, and PPLNS pays only if a block has been discovered, based on performance.
When choosing mining pools to contribute computing power to, some due diligence on the reliability of the pool is a must. On the flip side, for miners without major hash rate capabilities, it is for all intents and purposes a more economical approach.
How to Join a Zcash Mining Pool
To become a member of the chosen pool, make an account and configure your Zcash mining hardware to have it registered as a participant. The process varies in each case, so check with the pool’s tech support. Once you connect and set up, a dashboard where you can track the progress and performance of your Zcash mining machine(s). Check it regularly to keep making money mining!
Troubleshooting Common Issues
Hardware Compatibility Issues
If you detect abnormally low hash rates, it can be due to hardware problems, outdated drivers, or suboptimal settings. Troubleshoot and optimize hardware and software settings to improve performance.
Mining Software Configuration Issues
Other common issues include incorrect configuration, outdated software, or incompatibility with the mining pool. Refer to the mining software instructions for troubleshooting tips or contact the tech support of the pool, if you are in one.
Network and Internet Issues
Slow internet speeds, network congestion, or ISP throttling can throw a wrench into mining Zcash, too. In this case, the best source for troubleshooting tips would be your internet service provider.
Securing Your Earnings
Receiving and Securing Your Zcash Earnings
It will take a while for Zcash mining profits to amount to something, so sit tight. Check your account to withdraw mining pool profits or a connected wallet if you mine solo every once in a while.
Once your profits hit a considerable sum, safeguard them by moving to a longer-term, more secure storage option, such as a hardware wallet.
Where to Save Your Mined Coins
Zcash community and maintainers take security and privacy seriously, so the official list of supported wallets is a good place to start. It highlights our recommendations, too: Edge Wallet for mobile users and Trezor for secure storage in a hardware device.
Where to Exchange Zcash (ZEC)?
Another thing a Zcash miner should know is where to exchange or cash out their newly minted coins. We are glad to let you know that ChangeHero is a go-to place for ZEC swaps!
- Choose the currencies on the home page, amounts, and the type of exchange. Provide your wallet address in the next step and check the details;
- Double-check the provided information, read and accept the Terms of Use and Privacy Policy;
- Send the cryptocurrency for the swap in a single transaction. In a Fixed Rate transaction, you have 15 minutes before it expires;
- Sit back and relax. Now we are doing all the work: checking the incoming transaction and making the exchange as soon as it arrives;
- As soon as the exchange has been processed, your crypto is on its way to your wallet. And so, the transaction is finished!
The support team is here to help you 24/7, and in any case, reach them in the chat on the website or through the email: [email protected].
Conclusion
It might be challenging to make Zcash mining profitable in 2024 but fortune favors the brave. Don’t be discouraged too much and equip yourself with the knowledge we shared. Happy mining!
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Frequently Asked Questions
How profitable is Zcash mining?
The profitability of mining Zcash depends on the available hardware, electricity costs, and whether you do it solo or in a mining pool. With optimal conditions and considerable investment, even Zcash mining can bring profits. Consult a financial professional and check a Zcash mining calculator before making the decision.
Can ZEC be mined?
Yes, as a Proof-of-work cryptocurrency, Zcash (ZEC) is produced by crypto mining.
Is ZEC mining profitable?
Different sources provide conflicting information on Zcash mining profitability. According to the Zcash mining calculator by WhatToMine, making a profit is possible with Antminer Z15 or above. Its CoinWarz counterpart claims that the average hash rate of a solo miner will end up in financial loss.
Can I mine ZEC with GPU?
CPU mining and GPU mining Zcash used to be viable but these days, processors that are not custom-built struggle to compete against ASIC mining. A GPU can run the Zcash mining software but it is extremely unlikely to discover a block with its computing power.
