Zcash as we see it today was originally created in October of 2016 by a software developer known as Zooko Wilcox-O'Hearn. The idea behind this currency partially аrose from Bitcoin — Zooko liked the idea of Bitcoin, but generally did not enjoy the fact that just about anyone had a chance to see the transactions that occurred on the blockchain. As such, he made it his mission to create a blockchain that would allow people to send as well as receive cryptocurrency anonymously.
Now, this was no simple task. Zcash began by forking the original Bitcoin code and making various changes to it that made it private and quick with the use of a new privacy technology (first introduced in the 1980s) called zero-knowledge proofs.
When a blockchain is forked, what this essentially means is that the original code is copied, but the changes that are made to it are intended to make it better, or at least, different.
The Zcash blockchain has its own cryptocurrency, known as ZEC. There is a maximum of 21 million ZEC coins. This blockchain can process transactions quicker than Bitcoin’s blockchain and is a lot more scalable, which means that it can process a lot of transactions at once.
To summarize, Zcash is a blockchain and cryptocurrency that allows private transactions in a public blockchain, allowing businesses as well as consumers to control who gets to see the details of the transactions, even on a permissionless blockchain.
How to Mine Zcash
The genesis block of Zcash was mined on Oct. 28 , 2016. The network is secured using a proof-of-work mining algorithm, which means that miners compete against each other through the usage of processing power in order to produce a new block on the chain. The first one to produce the block gets awarded with a network standard block reward. For Zcash, a block reward of 3.125 ZEC comes into circulation every 75 seconds — this amount will be cut in half every four years in block halvings, until all 21 million ZEC are in circulation.
In the mining process, application-specific computers need to compete to find a solution to a difficult math problem that is pre-defined by the Equihash hashing algorithm. To mine Zcash, GPUs and ASICs are used; however, the rising hash rate and network difficulty means that GPU mining of Zcash is not recommended, and ASIC mining is more realistic.
You can potentially build a solid Zcash mining rig on your own; however, if you do not have that much disposable income for mining, you can also look for Zcash cloud mining alternatives. Zcash solo mining, like Bitcoin mining, has become prohibitively expensive in recent years, ASICs or not, due to the rising network hash rate.
If you want to start mining, you will first need to set up the mining hardware by getting specialized ASIC hardware — the most important thing here would be your power supply. Zcash’s guide to mining notes that due to the loud volume of ASICs during operation, it might be preferable to have your ASICs located at a mining hosting site for a fee.
Next, you will need to get a ZAC address. Before setting up the miner, you will need this wallet address. This is crucial due to the fact that the coins you are going to mine need an address to be sent to. You can store your coins in a hot wallet, which is any wallet that has a connection to the internet (these are typically web-based wallets and software wallets), or a cold wallet, which is specifically a hardware wallet that has no direct connection to the internet.
A hardware wallet is the most secure option, and most people recommend that you use that whenever possible.
The next steps for Zcash mining involve the actual act of mining.
When it comes to finding a Zcash miner, there are actually a surprising number of options out there. F2Pool, a popular crypto mining pool, has a list of the best miners for Zcash here, some of the top hardware includes miners from companies like Bitmain and Innosilicon.
Zcash Mining Pools
Zcash pool mining essentially provides you with a way to combine your efforts with other miners, or in other words, pool together with them in order to increase the chances that you will be rewarded the ability to mine a block. The miners of the pool can then split the reward based on the computing power that each miner contributed to the ZEC mining pool.
According to Zcash’s documentation, some of the top current mining pools for Zcash include Flypool, Nanopool and Slushpool.
Why Mine Zcash
Zcash is easily traded for Bitcoin, and it can be an affordable way to acquire cryptocurrencies. Zcash can also easily be exchanged for cash, and you can use it to fill up your bank account and earn fiat. You can also sell it or trade it on major cryptocurrency exchanges.
Should You Start Mining Zcash?
At the time of writing, ZEC has high liquidity and can easily be traded on many cryptocurrency platforms — Zcash can act as an entry point into the world of cryptocurrencies for a lot of users, as it is available on many exchanges and can easily be traded for any other type of currency. It is relatively easy to mine with the use of ASICs and pools compared to competing altcoins out there, and it is one of the altcoins that have the highest prices.
As well, if you believe in the creation of a cryptocurrency that has more than the average amount of privacy features — like Zcash’s transaction shielding — then your Zcash mining will support the network of a privacy-oriented coin.