Initially called the Zerocash Protocol, this altcoin began as a Bitcoin fork. With time, the blockchain community rim-sized the name to Zerocash and later on in 2016, to Zcash. The coin falls among a category of the three most popular privacy coins alongside Monero and Dash. This is the place that it differs from Bitcoin – privacy and transparency.
The coin securely encrypts all transactional information such as payment destination, the existence of the transaction or even the amount of money involved.
Whereas Bitcoin will register all transactions that are taking place and detail the amount of money involved. As with most cryptocurrencies, Zcash is dependent on miners to verify and add transactions to a public blockchain. Unlike Bitcoin nodes, where only one node validates a block; all nodes contribute to network validation while miners take on most of the blockchain load needed to secure the network.
Presently Zcash sits at number 24 on the top 100 cryptocurrencies as well as being one of the most popular crypto mining options on the planet. This step by step guide on how to mine Zcash will introduce you to the fundamentals of mining altcoins, and enlighten why the altcoin has become a trending topic among cryptocurrency miners. We are confident that proper knowledge is essential before embarking on your journey to start mining. Therefore, this guide will inform you everything there is to learn how to mine Zcash, what Zcash mining equipment and software you need to get started, and how profitable the endeavor could be.
The Basics of How to Mine Zcash
Types of Mining
As with Bitcoin and any other crypto mining venture, there are two main methods of mining the coin: Pool Mining or Solo Mining. Before we get to the differences between Mining Zcash Vs Mining Bitcoin, we will, first of all, distinguish between mining as a pool or to mine solo.
Solo mining is almost becoming obsolete in the era of profitable mining. While both Solo and pool mining bear similar results, upcoming GPU technology has skyrocketed the network hash rate. Making it almost impossible for low processing power equipment to get any profits. Whereas a solo miner will also be rewarded for successfully verifying a block, it is recommendable for beginners to take on pool mining. This is because the aggregated processing power among all participants within a mining pool is high and as per the high network hash rate.
Pool Mining translates to mining crypto through a combined effort with other miners. The rewards of successful block verification are awarded to all miners within a pool depending on the amount of computing power that each miner contributed to the network. While the reward is easily diminished depending on the number of miners in a pool, the chances of successful block verification are high. However, and in most occasions, participants have to pay a fee to join a mining pool.
Block reward is divided among the members
The Zcash blockchain issues a reward of 50 ZEC after the verification of every block. A block verification will take place after every ten minutes. In case you are part of a mining pool, the block reward is divided among the members of the pool based on the amount of computing power that each member used to mine the block.
A miner contributing the lowest amount of computational power will receive the lowest reward. On the other hand, 10% if the entire reward will be awarded to the Founder’s-Reward wallet address. This kitty goes towards the original developers of the network. Some key uses of this kitty are to support ongoing network development and initiatives such as non-profit ideals under the Zcash Foundation.
The blockchain generates new coins into the ecosystem during mining. The network creates fresh blocks every 2.5 minutes. It is worth noting the rewarding method follows the “slow-start mechanisms.” A mechanism that is quite different from other cryptocurrencies, for instance, bitcoin has been reducing its block reward by half, once every four years.
Ability to mitigate bug and security issues
However, the slow start mechanism would release a smaller amount of coins as block rewards during the early days; and continue increasing the coins over time. One benefit of the slow-start mechanism is its ability to mitigate bug and security issues in the early days of a blockchain. For instance, would a problem occur during the initial days of a blockchain, the slow-start mechanism, it would reduce its implications on the network?
Zcash uses the “proof of work” algorithm, on top of which it implements the “Equihash” algorithm. This Equihash algorithm is important because it reduces the difficulty in mining that is associated with GPU or CPU hardware. Equihash algorithm is incompatible with Application-specific Integrated Circuit Chips (ASIC); ASIC mining is usually so power-intensive that it would make it difficult to yield any profits without expensive mining units. Therefore, becoming an ideal mining platform for nascent miners to join without having pat with huge upfront investments. Furthermore, a potential miner can also take advantage of their existing CPUs, enrol into a mining pool and begin generating revenue pretty soon.
Zcash just like any other blockchain hash-rate has been on a gradual rise since its inception in 2016. A rising hash-rate indicates the amount of hardware being used. However, the blockchain keeps adjusting the difficulty level to ensure that new blocks will only be created within the average 2.5 minutes block time interval. This is the reason why it is impossible to increase the speed and reduce the average block time interval.
Note that the cryptocurrency’s monetary base is equal to bitcoin’s, this amount is 21 million ZEC units. As earlier mentioned a 10 percent of block rewards are usually distributed to Zcash stakeholders that comprise investors, founders, employees, and advisors.
The network has the reward presently at 12.5 ZEC per block. After every four years, 840,000 blocks are mined. A period when the block reward is halved. For instance, Zcash will halve the block reward this year(2020) to 6.25 and halve it again in 2024 to 3.12. Therefore, this also proves the famous coin that only those miners that begin early will earn any prudent rewards from cryptocurrency mining.
So how much is one likely to earn from Zcash mining?
Let us explore the potential rewards and the various factors that a miner’s reward is dependent on.
First, the equipment and electricity supply in an area will hugely influence the amount of reward. Another important factor is whether you are affiliated with any mining pool or going solo. Cryptocompare.com provides a calculator where you can input the amount of power consumption, hashing power and the cost of electricity per hour.
The calculator determines a definite profit ratio both per month and per day. We recommend you determine this calculation to influence your buying decision for the starting hardware and software. The calculator will come in handy in determining whether your capital investment is worth the resulting potential profit.
What you Need to Get Started with Mining Zcash
Hardware and software are essential prerequisites of any mining venture. The software should run on top of the right hardware, both of which directly influence what a miner can yield. However, to understand the actual requirements to get started, it is worth distinguishing among the three types of computation power used to mine crypto.
GPU, CPU and ASIC Mining
Graphics Processing Units (GPUs) as the name suggests are built to process computer graphics faster. Most GPU users are individuals that prefer flexibility, unlike the rigidity of CPUs and ASIC processors.
Computer Processing Units (CPUs) were popular for mining during the initial days of Bitcoin. However, ASIC chips have been taking over from CPU chips over time since they can outperform them by 1000,000 times. CPU chips are built to optimize runtime such that computable tasks can run against each other simultaneously.
Zcash uses the Equihash algorithm to exclude ASIC-hardware. ASIC was mainly developed for mining bitcoin. Therefore, its hashing methods is different to accommodate GPU/CPU mining.
ASIC chips are built to perform at the highest processing speed possible. An important feature to note about ASIC chips is they are built and customized for a specific coin. While you are not going to need them while mining Zcash, it is worth differentiating them from GPU and CPU miners.
ASIC equipment requires proper ventilation due to the extraneous amount of heat they generate. Additionally, these equipment consume high amounts of power, and the certainty of electricity bills spiking up is evident.
Choosing the Right Hardware for Zcash Mining
Hardware is an important factor to consider given it directly affects the number of profits you make. The Equihash algorithm heavily relies on massive amounts of Random Access Memory (RAM). A factor that leaves you with only two choices – either GPUs or CPUs.
When you decide to use CPU for zcash mining, ensure you have in place an adequate cooling mechanism. This will prevent the equipment from getting extremely hot. CPU mining is one of the benefits of mining Zcash. Unlike bitcoin, you won’t have to deal with a high initial investment.
Incase GPUs are your thing, you will have to pat with a little more investment to purchase the mining units. Remember your investment will depend on the amount of hashing power you require. And this hashing power will determine your profits. GPUs usually get hot and therefore require proper cooling units as well.
Several miner testimonials reveal how in their nascent days, they all began with their existing CPUs and with time, later upgraded to a GPU. Therefore, if you find purchasing a GPU rig that costs thousands of dollars is not ideal for your budget, consider using your normal CPU and later on upgrading to a GPU. Meanwhile, a GPU will widen your potential to get more profits and is suitable for those with more experience.
What Software to Use When Mining Zcash?
There is an overwhelming range of software to use when mining. All of which are coupled by thousands of instructional videos accessible via youtube. Most of the software is also free and easy to download.
Moreover, Zcash Company provides a community software called Zcash Miner which allows the miner to run a full node, use the CPU to mine and withdraw to an inbuilt wallet. The wallet can send or receive cash. Unfortunately, this official Zcash chip is limited to mine with CPU chips. Therefore, if your mining rig is optimized with GPU chips, consider getting some other mining software options.
Download and Install Appropriate Drivers
For AMD GPU Miners
Login to www.AMD.com and hit a tab marked ‘Support & Drivers.’ Key in the details of your GPU and hit ‘Display Results.’ To download the latest drivers, hit the resulting ‘Download Button.’ But if you want to download an older version, hit the tab marked ‘Previous Drivers & Software.’ We, however, recommend the latest miner drivers for the latest cards.
For Nvidia GPU Mining
Login to this website to download the latest version of drivers that support Nvidia GPU. Key in the details of your GPU units in the highlighted search bar and hit the search button. The button is highlighted in green. Click the top results to download the latest drivers.
Note: After installing either of the drivers, just normal as the installation of any computer driver; Reboot your PC and move on to the Device Manager. Double-check from here whether each driver installed correctly and that your windows system recognizes it.
When done with installing the drivers, there are two methods for installing your GPU miner. You could install them all at once or one at a time.
Register a Zcash Wallet Address
You need safe storage of your coins once you earn them. A secure place to start from is to use a hardware wallet. However, there are three types of wallets; Internet Wallets, Exchange Wallets and Hardware Wallets. Go to the official Zcash Website and there you will find the Zcash client wallet. The safest option, however, is a hardware wallet such as Trezor, Atom or Ledger Nano S.
Download and Install Mining Software (Downloading the EWBF Zcash Miner)
Go to Bitcointalk.com and download the EWFB Mining Program for Zcash. To avoid downloading trojans or any attack vector malware, make sure the download is from an official Bitcointalk thread. You will have to locate the latest version and use the mega download link to get it. The file is zipped and therefore you will need to unzip it/extract it to your desktop
Make sure you take note of the folder’s location. Ignore Window’s warnings if you downloaded the software from the official EWFB site.
Configure your Windows Settings
Turn off windows Sleep Mode. The PC should never sleep during mining. Modify the system setting page to 16GB/16384MB. Turn off all Windows updates as they could interfere with the mining process. Additionally, make sure Windows Defender does not flag the EWFB program as malware.
Enroll in a mining pool
Most solo miners enroll in mining pools to save on costs and make more. Probably, a workstation full of GPUs is the way to go. Will you choose to be a solo Zcash miner. There are several Zcash mining pools to choose from but in our guide, we will sample out Flypool. Go to the website and click on any help section that guides you on how to mine with them using EWFB. (Solely, all mining pools for Zcash have such a page).
Here, create a BAT file. Approach this by clicking the Windows – Nvidia Tab, depending on the PC and GPU type you are using. The resulting page below the tab is a miner script. Paste this into a folder on the EWFB miner program marked, ‘ Flypool bat file’
A bat file gives the commands to run/execute the miner software.
Afterward, include your Zcash wallet address on the bat file and finally save the bat file with a .bat extension.
Finally, you can start to mine and get started with mining ZEC coins
This is a wrap into the step by step process of mining the Zcash coin. In the future, if you have any questions you can drop them on our comment section or email us at Cryptopolitan. That’s it with our Zcash mining guide, you are set to start mining.